Tax relief for businesses on cars is restricted.  Cars purchased are generally excluded from the 100% annual investment allowance enjoyed on most equipment purchases.  Cars leased often have an element of the lease cost disallowed for tax purposes restricting the tax relief.

Rules for special relief for less polluting cars have been revised and extended.  Low emmission cars with CO2 emmissions below 110g/km do attract better tax relief than more polluting cars.  And ultra low emmission cars with CO2 emmisions below 50g/km fair better still.  The new rules now extend to 2021, previously ending in 2018.

The move is designed to change buying habits and is set to raise £120m in additional revenue for the Exchequer through to 2021.

As with all of our tax tips and web pages this information is necessarily summarised and of a general nature.  If you would like detailed specific advice please contact us.