If you are looking to change your company car in the New Year, you should be aware that changes are being made to the tax relief available to businesses for expenditure on or after 1 April 2018.
Under the new rules expenditure on cars with CO2 emissions:
- Not exceeding 110gm/km will be pooled in the main pool and obtain relief at 18% on a reducing balance basis; and
- Over 110 gm/km will be pooled in the special rate pool and obtain relief at 8% on a reducing balance basis.
100% first year allowance (FYA) have been extended for three years to 31 March 2021, however the CO2 threshold has also reduced to 50g/km.
Car hire contracts entered into after 1 April 2018 (corporation tax) or 6 April 2018 (income tax) will also be subject to the reduced emissions thresholds for the purpose of the lease rental restriction. Existing lease contracts should be unaffected.
If you require advice or assistance with any aspect of corporation tax, please contact
Michelle Andrews (Rugby) on 01788 539000 / Jon Kicks (Leicester) on 0116 261 0061