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Use this screen to enter the information for the Leased expensive cars required for Business Tax to calculate the add back lease/hire rentals paid in respect of ‘expensive cars’ that are subject to restriction. Expensive cars are those with an original retail price of more than £12,000 (£8,000 for leases commencing before 11/3/92).
To access this screen, select Edit | Leased expensive cars
Where a business has multiple trades, each individual leased expensive car must be allocated to a specific trade. Select the trade by selecting the Trade name drop-down option.
For leases commencing on or after 6th April 2021 with
CO2 emissions of over 50g/km or more face a 15% lease rental restriction
, meaning that they can only deduct 85% of any rental payments against
their taxable profits.
For leases commencing on or after 6th April 2018 with CO2 emissions of over 110g/km or more face a 15% lease rental restriction , meaning that they can only deduct 85% of any rental payments against their taxable profits.
For leases commencing on or after 6th April 2013 with CO2 emissions of over 130g/km or more face a 15% lease rental restriction , meaning that they can only deduct 85% of any rental payments against their taxable profits.
For leases commencing on or after 6th April 2009 with CO2 emissions of over 130g/km or more face a 15% lease rental restriction, meaning that they can only deduct 85% of any rental payments against their taxable profits.
In addition, where there is a chain of leases, this disallowance will only apply only to rental payments made by one lessee in a chain of leases.
Expenditure under leases that commenced prior 6th April (that is where the car is made available before April 2009) will continue to be subject to the 'old' rules.
The disallowable proportion of a leasing rental is calculated by reference to the following formula:
RENTAL – (( 12,000 + ½ (RETAIL PRICE – 12,000 )) x RENTAL )
RETAIL PRICE
Because leases can be from a previous period or be set up for the future, there is a tick box to show the data from the current period only.
Selecting the Leased expensive car option allows you to enter the:
Description
Start of lease (optional)
End of lease (optional)
Retail price
Total rental payments in this period
Cars purchased on and after 6th April 2009 have additional fields to be completed:
Make/Model
Fuel type
Carbon dioxide (CO2) emissions
Individual add back (for this CTAP)
The description, start and end dates, and retail price are retained from period to period. The user must enter the period rental each year. The deduction is shown in the trade Profits with a memo listing the calculation for each car.
Click here to view the rules on CO2 emissions.