Finance Act 2013

5 (1) Part 2 of CAA 2001 (plant and machinery allowances) is amended as follows. U.K.

(2) In Chapter 3 (qualifying expenditure), after section 38 insert—

“38ZA Vehicles for which deductions allowed at fixed rate under Part 2 of ITTOIA 2005

Expenditure is not qualifying expenditure if—

(a) it is incurred in respect of a vehicle in a period, and

(b) a deduction is made for the period in respect of the expenditure under section 94D of ITTOIA 2005 (deduction allowable at fixed rate for expenditure on vehicles).”

(3) In Chapter 5 (allowances and charges), in section 59 (unrelieved qualifying expenditure), at the end insert—

“(8) Subsection (9) applies if—

(a) a person carrying on a trade, profession or vocation incurs expenditure in relation to a vehicle,

(b) at the end of the basis period for a tax year, the person has unrelieved qualifying expenditure incurred in relation to the vehicle to carry forward from the chargeable period ending with that basis period (“the relevant chargeable period”),

(c) in calculating the profits of a trade, profession or vocation of a person for the following tax year, a deduction is made under section 94D of ITTOIA 2005 in respect of expenditure incurred in relation to the vehicle, and

(d) the person does not enter the cash basis for that tax year.

(9) None of the unrelieved qualifying expenditure incurred in relation to the vehicle may be carried forward as unrelieved qualifying expenditure from the relevant chargeable period.

(10) Where a person has unrelieved qualifying expenditure to carry forward from a chargeable period that is not expenditure allocated to a single asset pool, the amount of the unrelieved qualifying expenditure incurred in relation to the vehicle is to be determined on such basis as is just and reasonable in all the circumstances.”