The website of the British Vehicle Rental and Leasing Association
Members can access a comprehensive fact sheet on the new regime from the quick links box on the right
The expenditure on all business cars is now treated in three ways, depending on the CO2 emissions of each vehicle. Diesel and petrol engine vehicles will be treated the same way.
Expenditure is incurred as soon as there is an ‘unconditional obligation’ to pay for an asset, providing the expenditure is due to be paid within four months. For example, if a contract to purchase cars was entered into on 31 March 2009 and requires payment to be made on 31 July 2009, the payment obligation is treated as arising on 31 March 2009. These rules cater for situations where expenditure is incurred even though the cars are not delivered for some time after the new regime has started.
If the contract became unconditional after 8 December 2008 and the car is made available on or after 1 August 2009, the new rules apply even if the expenditure has been incurred before 1 April 2009.
If the contract became unconditional before 8 December 2008 for a car being made available on or after 1 August 2009, the current rules apply.
The old 'expensive cars' regime for vehicles costing over £12,000 (with an annual writing down cap of £3,000 and a balancing adjustment on disposal) remains in place for five years. Any balance of unrelieved expenditure left after the five years will be added to the general pool of unrelieved expenditure. This transitional period will finish at the close of the businesses’ first chargeable period to end on or after 31 March 2014.
Cars being leased after 1 April 2009 are treated in one of two ways:
All lease rental payments for cars costing more than £12,000 will be subject to the old rules until termination of the lease.
The new rules apply, the lease will be regarded as commencing from the date when the lessee is entitled to use the car under the lease.
As previously announced, daily rental cars have been brought into the new regime. The rules on acquisition outlined above are therefore applicable.
A daily rental company using leasing to fund cars emitting more than 160g/km will be liable to pay a lease rental restriction unless:
For further information on the above HMRC has published a guide, please click on the following link for more details http://www.hmrc.gov.uk/briefs/company-tax/brief2009.htm
The government has outlined its plans to take the following anti-avoidance measures:
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