BIM47714 - Specific deductions: travel and subsistence: cars - restriction of hiring costs: contents
In certain cases, the deduction for the cost of hiring a car which can be made in calculating the profits of a trade is restricted. A 15% restriction applies to cars with CO2 emissions of more than
- 50g/km for periods from 1 April 2021 (Corporation Tax) , 6 April 2021 (Income Tax)
- 110g/km for periods from 1 April 2018 (Corporation Tax) , 6 April 2018 (Income Tax)
- 130g/km for periods from 1 April 2013 (Corporation Tax) , 6 April 2013 (Income Tax)
- 160g/km for periods between 1 April 2009 and 31 March 2013 (Corporation Tax), 6 April 2009 and 5 April 2013 (Income Tax).
For hire periods beginning before 1 April 2009 for Corporation Tax purposes and 6 April 2009 for Income Tax purposes a different restriction applied. A graduated restriction applied to cars with a retail price when new of more than £12,000.
These rules do not apply to businesses using the cash basis (see BIM70000 onwards).
Hire period
A hire period begins on the first day on which the car is required to be made available for use under the hire agreement.
The guidance is laid out as follows.
| BIM47725 | Hire periods beginning on or after 1/6 April 2009 |
|---|---|
| BIM47730 | Hire periods beginning on or after 1/6 April 2009: scope |
| BIM47740 | Hire periods beginning on or after 1/6 April 2009: calculation |
| BIM47745 | Hire periods beginning on or after 1/6 April 2009: carbon dioxide emissions |
| BIM47750 | Hire periods beginning on or after 1/6 April 2009: short-term hiring in and long-term hiring out |
| BIM47755 | Hire periods beginning on or after 1/6 April 2009: linked periods |
| BIM47760 | Hire periods beginning on or after 1/6 April 2009: apportionment |
| BIM47765 | Hire periods beginning on or after 1/6 April 2009: condition B |
| BIM47770 | Hire periods beginning on or after 1/6 April 2009: connected persons |
| BIM47775 | Hire periods beginning on or after 1/6 April 2009: election for old rules |
| BIM47780 | Hire periods beginning before 1/6 April 2009 |
| BIM47785 | Hire periods beginning before 1/6 April 2009: calculation |
For detailed guidance on wholly and exclusively rules for travel costs, see BIM37600 onwards.
Intangible assets regime
If a company incurs car hire costs after 31 March 2002, it is possible that the expenditure may fall within the intangible assets regime, see CIRD12620