Leased Expensive Cars

To access this screen select Edit, Leased expensive cars..  

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).

 

Leases commencing on or after 6 April 2013 for Income Tax

For leases commencing on or after 6 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.

 

Leases commencing on or after 6 April 2009 for Income Tax

For leases commencing on or after the 6 April 2009, cars 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 to rental payments made by one lessee in a chain of leases.

 

Leased Expensive Cars Prior 6 April 2009

 

The disallowable proportion of a leasing rental is calculated by reference to the following formula:

Rental -

(( 12,000 + 1/2 ( 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.

By entering the information of the leased expensive car Business Tax will calculate the disallowance.

 

Selecting the Leased expensive car option allows you to enter the:

Cars purchased on and after the 6 April 2009 have additional fields to be filled out:

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.