BIM47714 | Specific deductions: travel and subsistence: cars - restriction of hiring costs: contents

In certain cases, the deduction for the cost of hiring a car which can be made in calculating the profits of a trade is restricted. A 15% restriction applies to cars with CO2 emissions of more than

• 50g/km for periods from 1 April 2021 (Corporation Tax) , 6 April 2021 (Income Tax)

• 110g/km for periods from 1 April 2018 (Corporation Tax) , 6 April 2018 (Income Tax)

• 130g/km for periods from 1 April 2013 (Corporation Tax) , 6 April 2013 (Income Tax)

• 160g/km for periods between 1 April 2009 and 31 March 2013 (Corporation Tax), 6 April 2009 and 5 April 2013 (Income Tax).

For hire periods beginning before 1 April 2009 for Corporation Tax purposes and 6 April 2009 for Income Tax purposes a different restriction applied. A graduated restriction applied to cars with a retail price when new of more than £12,000.

These rules do not apply to businesses using the cash basis (see BIM70000 onwards).

Hire period

A hire period begins on the first day on which the car is required to be made available for use under the hire agreement.

The guidance is laid out as follows.

For detailed guidance on wholly and exclusively rules for travel costs, see BIM37600 onwards.

Intangible assets regime

If a company incurs car hire costs after 31 March 2002, it is possible that the expenditure may fall within the intangible assets regime, see CIRD12620