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Version Superseded: 01/04/2009
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Income and Corporation Taxes Act 1988, Section 578A is up to date with all changes known to be in force on or before 01 September 2024. There are changes that may be brought into force at a future date. Changes that have been made appear in the content and are referenced with annotations.
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(1)This section provides for a reduction in the amounts—
(a)allowable as deductions in computing profits chargeable to [F2corporation tax] under Case I or II of Schedule D,[F3 or]
(b)which can be included as expenses of management of [F4a company with investment business] (as defined by section 130),F5. . . [F6 or
(bb)which can be brought into account under section 76 as expenses payable,]
(c)F5. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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.
[F7(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—
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.]
Textual Amendments
F1Ss. 578A, 578B inserted (with effect in accordance with s. 579 of the amending Act) by Capital Allowances Act 2001 (c. 2), Sch. 2 para. 52 (with Sch. 3 para. 113)
F2Words in s. 578A(1) substituted (6.4.2005 with effect in accordance with s. 883(1) of the amending Act) by Income Tax (Trading and Other Income) Act 2005 (c. 5), Sch. 1 para. 238 (with Sch. 2)
F3Word at the end of s. 578A(1)(a) inserted (with effect in accordance with s. 57(4) of the amending Act) by Finance Act 2001 (c. 9), Sch. 12 Pt. 2 para. 11(a)
F4Words in s. 578A(1) substituted (28.9.2004 with effect in accordance with art. 1(2) of the amending S.I.) by The Finance Act 2004, Sections 38 to 40 and 45 and Schedule 6 (Consequential Amendment of Enactments) Order 2004 (S.I. 2004/2310), art. 2, Sch. para. 25(2)
F5S. 578A(1)(c) and preceding word repealed (with effect in accordance with s. 57(4), Sch. 33 Pt. 2(1) Note of the repealing Act) by Finance Act 2001 (c. 9), Sch. 12 Pt. 2 para. 11(b), Sch. 33 Pt. 2(1)
F6S. 578A(2)(bb) and preceding word inserted (28.9.2004 with effect in accordance with art. 1(2) of the amending S.I.) by The Finance Act 2004, Sections 38 to 40 and 45 and Schedule 6 (Consequential Amendment of Enactments) Order 2004 (S.I. 2004/2310), art. 2, Sch. para. 25(3)
F7S. 578A(2A)(2B) inserted (with effect in accordance with s. 60(2) of the amending Act) by Finance Act 2002 (c. 23), s. 60(1)
Modifications etc. (not altering text)
C2S. 578A(2)(3) modified (with effect in accordance with s. 80(2) of the 2002 amending Act) by Finance Act 1993 (c. 34), s. 93A(4)(a)(6)(a) (as inserted by Finance Act 2002 (c. 23), Sch. 24 para. 4)
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