YOU can get business tax relief on the company cars purchased by your small business. Capital costs can be set against the taxable income of your company.
There are three levels of capital allowances for company cars applicable from 01 April 2015: the lower the rate of the CO2 emissions, the quicker the tax relief.
- 100% capital allowances for company cars with CO2 emissions up to 75g/km. Claimable until the end of March 2018
- 18% capital allowances for company cars with CO2 emissions between 76g/km-130g/km
- 8% capital allowances for company cars with CO2 emissions of 131g/km or more.
For sole traders or partnerships, capital allowances are treated slightly differently, with a percentage of the private use deducted before capital allowances are applied.
Speak to your accountant or tax adviser for further information applicable to your position about accounting for capital allowances.
- Capital allowances will change from April 2018. For details click here.