Are you planning to buy a car for your business soon?
The 2012 budget announced some changes to the capital allowance regime for business cars. Buying a car for your business before the 6 April 2013 (for businesses in the charge to income tax) or 1 April 2013 (for businesses in the charge to corporation tax) could be beneficial.
Currently, for cars with CO2 emissions up to the 110g/km threshold you can claim up to 100 percent allowance in the accounting period when they were bought. The 110g/km threshold will be reduced to 95g/km from 1 April 2013 to match EU emission targets.
Cars with CO2 emissions above the 160g/km threshold go into the special rate pool and qualify for writing-down allowances at the rate for the special rate pool, currently 8 percent per annum. The160g/km threshold will be reduced to 130g/km, and the associated lease rental restriction will also be amended in line with this change.
For cars with CO2 emissions between 110g/km and 160g/km, these currently go into the main pool and qualify for writing-down allowances at the rate for the main pool, 18 percent at present. These bands will be adjusted accordingly to reflect the above changes.
As explained, delaying the decision to buy a new car for your business could significantly reduce the amount of writing-down allowances for your business.
Please contact us if you would like any further information.