RE: Well we knew it was coming10 Jun 2019 08:02
Capital allowances
Capital allowances enable companies to write down the cost of purchasing cars and vans against taxable profits. At first it may appear complicated but the main thing to remember is that cars and vans with CO2 emissions of 75g/km or less are eligible for 100% first year capital allowances until 31 March 2018. From then until April 2021, the threshold for qualifying cars will reduce to 50g/km.
For zero-emission vans, this benefit is limited to businesses that do not claim the government’s Plug-in Van Grant.
In contrast, on cars with emissions of 76-130g/km and above 130g/km you can only write down 18% and 8%, respectively, of the cost of a car against your company’s taxable profits each year. Business expenditure on vans (ex-VAT) that are not zero-emission qualify for tax relief as capital allowances at the rate of 18% a year.
From April 2018, the 18% capital allowance will apply to cars with CO2 emissions of 51-110g/km, with vehicles above 110g/km in the 8% category.
Don’t forget – you can also claim 100% first year allowances on electric vehicle chargepoints installed at your workplace before 2019 – allowing you to deduct the cost of the chargepoint from company pre-tax profits each year. So get installing now!