IF you’re thinking of changing your car, now’s the time to do it. And take advantage of more generous tax allowances before the April tax changes.
The savings can be impressive.
If you run your own business, and buy a car that has CO2 emissions below 110g/km you can claim 100% first year allowances –as long as it’s bought before April (if your business is incorporated) or 05 April for the self-employed.
Typical cars are:
- Audi A1 Sportback 1.6 TDI S Line 105PS 5-spd Manual (99g/km)
- BMW 3 Series Saloon 320d EfficientDynamics Auto 8-spd Automatic (109g/km)
- Mercedes-Benz E-Class Saloon E 300 BlueTEC Hybrid SE G-Tronic Plus 7-spd G-Tronic Plus (109g/km) – and winner of our Best Company Car of the Year
After April, the 100% WDA drops to 95g/km so none of these cars would qualify for the same writing down allowances if bought after that date. Instead, all will be reduced to 18% writing down allowance (WDA) on a reducing balance basis.
So the savings by acting now can be considerable.
Similarly if you are thinking of purchasing a car – whether by cash, hire purchase or lease purchase – with emissions between 130g/km to 160g/km, do it before April.
That’s because until April, cars with CO2 emissions between 111g/km-160g/km qualify for an 18% WDA.
Typical cars are:
- Hyundai i40 Tourer1.7 CRDi Premium 136PS Manual (134g/km)
- Peugeot 208 3 Door1.6 THP GTi 200 6-spd Manual (139g/km)
- Vauxhall Insignia Sports Tourer 2.0 CDTi Elite 160PS 6-spd Manual (134g/km)
After April these cars will only receive a writing down allowance of 8% per annum – a significant reduction.
“If your choice of car falls in the range of 130g/km to 160g/km or 95g/km to 110g/km you could be adversely affected by delaying,” warns accountancy practice UHY Hacker Young Associates.
So if you want a new car – just do it! Or pay the financial penalty.
As ever, you should take professional advice before taking any decisions as circumstances vary.
Why not read this too? Click Radical change to 2013 writing down allowances.