‘Capital allowances on cars’

Capital allowances on cars

Wednesday, May 22nd, 2013

The rules governing tax relief on cars changed recently.

100% First Year Allowances will be available on cars purchased from 1 April 2013 until 31 March 2015, where emissions are less than 95g/km.

This means that the full cost of the car is tax deductible provided the emissions do not exceed 95g/km.

Also, for cars purchased from 1 April 2013, the standard 18% tax relief (writing down allowance) will be available where emissions  are less than 130g/km. Above this emissions threshold, the rate drops to 8%.

There are separate rules for leased cars which need to be considered when planning capital expenditure.

In an extra green measure, Budget 2013 announced that the 100% First Year Allowance for cars purchased emitting no more than 75g/km would be extended until 31 March 2018 which the government hopes will result in an increased spend on the most environmentally-friendly cars.

Suzanne Blundell

Curo 2013

To discuss capital allowances on cars and how they affect your business, contact Curo’s head of tax, Julia Whelan at [email protected] or call Julia on 01527 558539..