With the end of the tax year rapidly approaching many of you may be rushing to take advantage of an Isa account to enjoy your tax break. However, don’t forget about the changes that will be made to green car taxes too.
From April 1 (April 6 for unincorporated businesses) companies that buy cars with carbon dioxide (CO2) emissions below 110g/km will receive 100 per cent tax allowance on the cost. For vehicles with emissions ranging from 110g/km-160g/km the annual tax allowance will be 20 per cent and for vehicles above 160g/km the allowance will only be 10 per cent calculated on a reducing balance basis.
An additional change applies to vehicles that cost more than £12,000. Currently the writing down allowance for these cars is £3,000 maximum but on sale the balance of any unrelieved cost is allowed.
However, for cars purchased after the dates listed above there will be no balancing allowance and the business will continue to attract writing down allowances each year at either a 10 or 20 per cent rate depending on its CO2 emissions.
For leased cars that cost more than £12,000, there is currently a restriction based on the cost of the car. However, this will be adjusted to solely reference the CO2 emissions of the vehicle being leased. For vehicles that have CO2 emissions of 160g/km or less the full lease payment will be allowed for tax purposes – those with higher emissions will be restricted to 15 per cent.
