Corporation Tax Act 2009 section 58

Hiring cars (but not motor cycles) with low CO2 emissions before 1 April 2013

Section 58 provides an exemption from the normal restriction on car hire deductions for certain low-emission cars hired before 1 April 2013.

• Cars with low CO2 emissions hired before 1 April 2013 under contracts entered into before that date are exempt from the usual 15% restriction on car hire cost deductions
• Low emissions are defined by reference to the capital allowances rules for environmentally beneficial cars in section 45D of the Capital Allowances Act 2001
• For cars hired on or before 31 March 2008, the CO2 emissions threshold remains at 120 grams per kilometre rather than the later reduced limit of 110 grams per kilometre
• The equivalent income tax rule for unincorporated businesses is found in section 50 of the Income Tax (Trading and Other Income) Act 2005