New tax regime for company cars

From 1 April 2009, the government have brought into place a new set of rules to obtain tax relief on business cars. 

As a result, for each vehicle purchased by the company after that date, the CO2 emissions will determine the tax relief available as follows:

For vehicles in excess of 160 g/km

  • Eligible for inclusion in special rate pool with tax allowances of 10% .reducing balance available each year;

For vehicles between 111 to 160 g/km

  • Eligible for inclusion in the main pool with tax allowances of 25% reducing balance available each year;  

For vehicles below 110 g/km

  • Eligible for 100% first year allowances. 

Please note that this relief relates to expenditure on vehicles purchased by the company.  This will obviously create an additional record-keeping burden on companies to ensure they are allocating the vehicles to the correct pool.