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Version Superseded: 06/04/2009
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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 10 July 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 [F7which is not—
(a)a car that is first registered before 1 March 2001,
(b)a car that has low CO2 emissions (as defined in section 104AA of the Capital Allowances Act),
(c)a car that is electrically propelled (as defined in section 268B of that Act), or
(d)a qualifying hire car.]
“Car” and “qualifying hire car” are defined by section 578B.
[F8(2A)F9. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(2B)F9. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]
[F10(2C)This section does not apply to the hiring of a car where condition A or condition B in section 58A of CTA 2009 (short-term hiring in and long-term hiring out) is met.]
(3)The amount which would, apart from this section, be allowable or capable of being included must be reduced by [F1115%].
(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 [F1215%].
[F13(5)For the purposes of section 50B of ITTOIA 2005 (connected persons: application of restrictions), this section is to be treated as if it were part of section 48 of that Act.]]
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(2)(a)-(d) and preceding words substituted for s. 578A(2)(a)(b) (with effect in accordance with Sch. 11 paras. 65-67 of the amending Act) by Finance Act 2009 (c. 10), Sch. 11 para. 62(2)
F8S. 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)
F9S. 578A(2A)(2B) omitted (with effect in accordance with Sch. 11 paras. 65-67 of the repealing Act) by virtue of Finance Act 2009 (c. 10), Sch. 11 para. 62(3)
F10S. 578A(2C) inserted (with effect in accordance with Sch. 11 paras. 65-67 of the amending Act) by Finance Act 2009 (c. 10), Sch. 11 para. 62(4)
F11Words in s. 578A(3) substituted (with effect in accordance with Sch. 11 paras. 65-67 of the amending Act) by Finance Act 2009 (c. 10), Sch. 11 para. 62(5)
F12Words in s. 578A(4) substituted (with effect in accordance with Sch. 11 paras. 65-67 of the amending Act) by Finance Act 2009 (c. 10), Sch. 11 para. 62(6)
F13S. 578A(5) inserted (with effect in accordance with Sch. 11 paras. 65-67 of the amending Act) by Finance Act 2009 (c. 10), Sch. 11 para. 62(7)
Modifications etc. (not altering text)
C1S. 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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