allowances
The changes from April 2009 in capital allowances (CAs) and
other business expenditure on cars will have big effects on
contract hire and leasing. Cars above the 165g/km emission limit
will attract very low CAs at 10 per cent per annum. Even most other
cars will only attract 20 per cent CAs, compared with 25 per cent
up to now.
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Worst of all is that there will be continued discrimination
against leasing, compared with alternative financing options. Where
cars are on the wrong side of the emissions limit, there will be a
restriction on tax deductions for rentals for the lessee, as well
as the very unfavourable CA rate for the lessor.
The only good news is that the industry has a year to adapt its
systems to the new emissions based CAs.
Motor Finance Issue: 41 – March 08
Published for the web: March 13 08 12:30
Last Updated: March 13 08 12:35
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