Income and Corporation Taxes Act 1988

[F1 76ZN Car or motor cycle hire U.K.

(1) Subsection (2) applies if—

(a) in calculating the corporation tax to which a company is liable for an accounting period, an amount representing expenses incurred on the hiring of a car F2 . . . can be brought into account under section 76 as expenses payable, and

[F3 (b) the car is not—

(i) a car that is first registered before 1 March 2001,

(ii) a car that has low CO₂ emissions (as defined in section 104AA of the Capital Allowances Act),

(iii) a car that is electrically propelled (as defined in section 268B of that Act), or

(iv) a qualifying hire car.]

[F4 (1A) Subsection (2) does not apply if condition A or condition B in section 58A of CTA 2009 (short-term hiring in and long-term hiring out) is met.]

(2) The amount that would otherwise be capable of being brought into account as expenses payable is reduced by [F5 15%].

(3) Subsection (4) applies if an amount is reduced as a result of subsection (2), or a corresponding provision, and—

(a) subsequently—

(i) there is a rebate (however described) of the hire charges, or

(ii) a debt in respect of any of the hire charges is released otherwise than as part of a statutory insolvency agreement, and

(b) an amount is brought into account in respect of the rebate or release.

(4) For the purposes of subsection (3)(b) an amount is brought into account in respect of a rebate of hire charges or the release of a debt if—

(a) the amount of a reversal representing the rebate or release falls to be deducted under Step 4 in section 76(7), or

(b) (in the case of a rebate of hire charges) an amount representing the rebate is chargeable under section 85(1) of the Finance Act 1989 (c. 26).

(5) The amount that would otherwise be deductible as mentioned in subsection (4)(a) or chargeable as mentioned in subsection (4)(b) is reduced by [F6 15%].

(6) In this section “corresponding provision” means—

(a) section 56(2) of CTA 2009 (car F7 . . . hire: trade profits and property income),

(b) section 1251(2) of CTA 2009 (car F7 . . . hire: companies with investment business), and

(c) section 48(2) of ITTOIA 2005 (car F7 . . . hire: trade profits and property income).

(7) F8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(8) In this section “car F9 . . . ” and “qualifying hire car F9 . . . ” have the meanings given by section 57 of CTA 2009.

[F10 (9) For the purposes of section 50B of ITTOIA 2005 and section 58B of CTA 2009 (connected persons: application of restrictions), this section is to be treated as if it were part of section 56 of CTA 2009.]]

Textual Amendments

F1 S. 76ZN and cross-heading inserted (1.4.2009 with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), Sch. 1 para. 44 (with Sch. 2 Pts. 1, 2)

F2 Words in s. 76ZN(1)(a) 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. 60(2)(a)

F3 S. 76ZN(1)(b) substituted for s. 76ZN(1)(b)(c) (with effect in accordance with Sch. 11 paras. 65-67 of the amending Act) by Finance Act 2009 (c. 10), Sch. 11 para. 60(2)(b)

F4 S. 76ZN(1A) inserted (with effect in accordance with Sch. 11 paras. 65-67 of the amending Act) by Finance Act 2009 (c. 10), Sch. 11 para. 60(3)

F5 Words in s. 76ZN(2) substituted (with effect in accordance with Sch. 11 paras. 65-67 of the amending Act) by Finance Act 2009 (c. 10), Sch. 11 para. 60(4)

F6 Words in s. 76ZN(5) substituted (with effect in accordance with Sch. 11 paras. 65-67 of the amending Act) by Finance Act 2009 (c. 10), Sch. 11 para. 60(5)

F7 Words in s. 76ZN(6) 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. 60(6)

F8 S. 76ZN(7) 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. 60(7)

F9 Words in s. 76ZN(8) 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. 60(8)

F10 S. 76ZN(9) inserted (with effect in accordance with Sch. 11 paras. 65-67 of the amending Act) by Finance Act 2009 (c. 10), Sch. 11 para. 60(9)