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HMRC internal manual

Business Income Manual

Specific deductions: travel and subsistence: cars - restriction of hiring costs: hire periods beginning on or after 1/6 April 2009: carbon dioxide emissions

S104AA, S268C Capital Allowances Act 2001, S48 Income Tax (Trading and Other Income) Act 2005, S56 Corporation Tax Act 2009

This guidance applies to expenditure incurred on hiring cars where the hire period begins on or after 1 April 2009 for Corporation Tax purposes and 6 April 2009 for Income Tax purposes. See BIM47775 for the election to apply the previous rules where the hire period begins on or after 1/6 April 2009 but before 1/6 April 2010.

Carbon dioxide emissions data

The restriction at BIM47740 does not apply to a car that has low CO2 emissions.

For the purposes of the restriction a car has low CO2 emissions if:

  • when the car is first registered it is so registered on the basis of a qualifying emissions certificate; and
  • the applicable CO2 emissions figure in relation to the car does not exceed 110 grams per kilometre driven (g/km) (130g/km for cars bought before 1 April 2018).

A ‘qualifying emissions certificate’ is an EC certificate of conformity or UK approval certificate which specifies a CO2 emissions figure. This figure is the applicable emissions figure. In the case of bi-fuel cars where the certificate specifies more than one emissions figure, the emissions (combined) figure is taken.

Cars sold in the United Kingdom and in other European Union countries are required to meet safety and environmental standards under European legislation. Each car must conform to a type (of which a sample has been submitted by the manufacturer or importer) that has been approved by a national certification agency. The level of CO2 emitted by the car on a prescribed test cycle is one of the factors recorded during the type approval testing procedure.

The emissions figure is found on the car’s registration document form V5C. The CO2 emissions levels for different makes and models of cars can be found on the Vehicle Certification Agency (VCA) website: .