Lease rental restriction

For busineses that hire or lease their cars, tax relief is limited for higher emitting vehicles

From April 2013 - based on CO2 emissions

For contracts entered in to from April 2013, tax relief for leased cars is limited according to the CO2 emissions as follows:

CO2 emissions Allowed rentals Disallowed rentals
130 g/km or below 100% 0%
Above 130 g/km 85% 15%

For corporation tax purposes the thresholds noted above apply for cars leased on or after 1 April 2013. For income tax purposes the thresholds apply for cars leased on or after 6 April 2013.

From April 2009 to March 2013 - based on CO2 emissions

For contracts entered in to between April 2009 and March 2013, tax relief for leased cars is limited according to the CO2 emissions as follows:

CO2 emissions Allowed rentals Disallowed rentals
160 g/km or below 100% 0%
Above 160 g/km 85% 15%

In line with Budget 2016 changes to Writing Down Allowances, it is likely that the lease rental restriction threshold will fall to 110g/km for the three years commencing April 2018.

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