isramart: Capital allowances to be based on emissions of CO2 from April 2009

isramart news

With effect from April 2009 the capital allowance treatment of all cars will be reformed to favour those with low CO2 emissions.

Expenditure on cars with CO2 emissions above 160g/km will attract 10% writing down allowance (WDA) while expenditure on cars with CO2 emissions of 160g/km or below will attract 20% WDA.

The rules which disallow a proportion of car lease rental payments will be reformed in line with the new capital allowances rules. The new disallowance will be 15% of the relevant payments, applied to cars dealt with the 10% special rate pool.

In addition to this, the 100% first year allowance (FYA) for the cleanest cars will be extended from March 31, 2008, to March 31, 2013, and the qualifying CO2 emissions threshold will be reduced to 110g/km.