- From April 2021 until April 2025 Companies purchasing zero emission cars are able to write down the full cost of these vehicles against their taxable profits in the first year of ownership
- Companies purchasing cars with CO2’s of 50g/km or less should allocate the expenditure to the main rate pool – where they will be able to write down 18% of the cost of these vehicles against their taxable profits each year, on a reducing balance basis.
- Companies purchasing cars with emissions of 51g/km and above must allocate the expenditure to a ‘special rate’ plant and machinery pool – where they will be able to write down only 6% of the cost of these vehicles against their taxable profits each year, on a reducing balance basis.
- The percentage of leasing and contract hire payments that are allowable against a companies profits have improved considerably since the changes introduced in April 2009.
- Quite simply for cars with CO2 emissions of less than 51g/km 100% of the rentals are allowable.
- For cars with CO2 emissions of 51g/km or above, 85% of the rentals can be deducted from a company’s taxable profit.
- “From a purely financial standpoint it looks as if leasing could become the dominant method of funding for most cars” Dan Rees, Business Car Consultant, Deloitte & Touche