The government’s proposed changes to business car capital
allowances, which come into effect on April 1 2009, will not affect
leased cars on contracts taken out before that date, the British
Vehicle Rental & Leasing Association (BVRLA) has uncovered.
The changes to capital allowances will hit higher-polluting
cars: writing-down allowances for leased cars which emit over
160g/km of CO2 will be cut from 20 per cent per year (itself a
reduction, as of April 1 2008, from 25 per cent per year prior to
this date) to 10 per cent.
However, an internal government briefing document seen by the
BVRLA confirmed that 160g+ cars leased before the start of April
next year will be exempt from the change to 10 per cent annual
writing-down allowance, meaning that lessors have an incentive to
rush this kind of vehicle onto their books before the change takes
effect.
Go deeper with GlobalData
“Whilst there are still a number of transitional issues that
will need to be resolved [such as] how long will the existing
regime be allowed for run out, will lessors be allowed to elect
into the new regime etc., it is clear from the above that it is the
Treasury intention to apply the new regime to new cars from April 1
2009 until or unless we are advised differently,” said BVRLA
director-general John Lewis.
See Taxman offers green incentive for company
cars for more from the BVRLA
Motor Finance Issue: 45 – July 08
by Jo Tacon ,
Published for the web: July 25 08 16:14
Last Updated: July 25 08 16:16
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