PART XIII MISCELLANEOUS SPECIAL PROVISIONS

CHAPTER VI OTHER PROVISIONS

Miscellaneous

F1578A Expenditure on car hire

(1)

This section provides for a reduction in the amounts—

(a)

allowable as deductions in computing profits chargeable to tax under Case I or II of Schedule D,F2 or

(b)

which can be included as expenses of management of F3a company with investment business (as defined by section 130),F4. . . F5 or

(bb)

which can be brought into account under section 76 as expenses payable,

(c)

F4. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

for expenditure on the hiring of a car to which this section applies.

(2)

This section applies to the hiring of a car—

(a)

which is not a qualifying hire car, and

(b)

the retail price of which when new exceeds £12,000.

“Car” and “qualifying hire car” are defined by section 578B.

F6(2A)

This section does not apply to the hiring of a car, other than a motorcycle, if—

(a)

it is an electrically-propelled car, or

(b)

it is a car with low CO2 emissions.

(2B)

In subsection (2A) above—

“car” has the meaning given by section 578B;

“car with low CO2 emissions” has the meaning given by section 45D of the Capital Allowances Act 2001 (expenditure on cars with low CO2 emissions to be first-year qualifying expenditure);

“electrically-propelled car” has the meaning given by that section.

(3)

The amount which would, apart from this section, be allowable or capable of being included must be reduced by multiplying it by the fraction—

£12,000+P2Pmath

where P is the retail price of the car when new.

(4)

If an amount has been reduced under subsection (3) and subsequently—

(a)

there is a rebate (however described) of the rentals, or

(b)

there occurs in connection with the rentals a transaction that falls within section 94 (debts deducted and subsequently released),

the amount otherwise taxable in respect of the rebate or transaction must be reduced by multiplying it by the fraction in subsection (3) above.