Capital Allowances

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The Capital allowance treatment of company cars, where the capital cost can be off-set against corporation tax, is based on COemissions. Since April 2013, vehicles emitting less than 95g/km of carbon dioxide can be written down fully in their first year. That means that the entire capital cost is allowable against the profits of which Corporation tax will be charged. The 100% allowance is not available if the vehicle is being leased. 

Cars & Writing Down Allowances

  2013-14 2014-15 2015-16 2016-17 2017-18
First year Allowance (100%). Does not apply to used cars 95g or less 95g or less 75g or less 75g or less 75g or less
Write Down allowance (18%). For new cars see FYA above. up to and including, 130g up to and including, 130g up to and including, 130g up to and including, 130g up to and including, 130g
Write Down Allowance (8%) >130g >130g >130g >130g >130g

 

Cars Purchased after 1st April 2013 with emissions:

  • Over 130g/km qualify for the standard allowance, this is called a 'writing down allowance' and allows 8% a year of the value to be offset against income.
  • Over 95g/km to 130g/km qualify for writing down allowances at 18% a year.
  • If the car emits 95g/km or less it can qualify for a 100% first-year allowance. The car must be new and not second-hand. Cars that are leased also do not qualify. this emission threshold will change to 75g/km for the period April 2015 to March 2018.