Section 56 | Car ... hire

(1)Subsection (2) applies if, in calculating the profits of a trade, a deduction is allowed for expenses incurred on the hiring of a car which is not——

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

(b)a car that has low CO 2 emissions,

(2)The amount of the deduction which would otherwise be allowable is reduced by 15%.

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

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

(b)a debt in respect of any of the hire charges is released otherwise than as part of a statutory insolvency arrangement.

(4)The amount that, as a result of the rebate or release—

(a)is brought into account as a receipt of the trade, or

(b)is treated as a post-cessation receipt under section 193 (debts released after cessation),

is reduced by 15%.

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

(a)section 1251(2) (car ... hire: expenses of management), including as applied by section 82(4) of FA 2012, or

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

(c)Repealed

(6)Repealed