9 October 2007
Consultation on modernising tax relief for business expenditure on cars: summary of responses
At Budget 2006 the Government launched a consultation on modernising tax relief for business expenditure on cars. This discussed replacing the existing capital allowance rules that apply to cars costing over £12,000 with the introduction of a range of first-year capital allowances based on CO2 emissions, with the balance of unrelieved expenditure being taken to a new car pool with lower writing down allowances than the general pool.
An update was published in March 2007 in which views were sought on a refined proposal that utilised two pools, the general plant and machinery pool and a lower rate pool and introduced a threshold for emissions. Which pool expenditure would be allocated to would depend on whether or not the CO2 emission levels were above or below the threshold. The update document also sought views on proposals to reform the lease rental restriction utilising the same emissions threshold and applying a uniform fixed percentage disallowance on relevant payments on cars with emissions above the threshold.
The Government is publishing today a summary of the responses received in respect of these two documents.
Consultation on modernising tax relief for business expenditure on cars: summary of responses is available in Adobe Acrobat Portable Document Format (PDF). If you do not have Adobe Acrobat installed on your computer you can download the software free of charge from the Adobe website. For alternative ways to read PDF documents and further information on website accessibility visit the HM Treasury accessibility page.
Media links
Related links
- Budget 2006: Modernising tax relief for business expenditure on cars: a consultation document
- Budget 2007: Modernising tax relief for business expenditure on cars: a consultation update
back to top
2007 Pre-Budget Report and Comprehensive Spending Review index