HMRC have issued Brief 20/09, which will be of interest to all businesses that buy or lease cars or that sell or lease cars to other businesses.
In the 2008 Pre-Budget Report, the government announced that the current capital allowance rules for 'expensive cars' and the associated rules that restrict deductions for expenditure on hire of 'expensive cars' are to be abolished; and replaced with new rules whereby the writing down allowances (WDA) and the restriction on deductions for expenditure on car hire are based on a car's carbon dioxide (CO2) emissions. Draft legislation was published in a technical note on 8 December 2008.
The legislation has been amended in the light of comments received and the current draft also includes anti avoidance measures that were mentioned but not exposed in the technical note.
For further commentart on the new draft legislation, see HMRC Brief 20/09.
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