Last week we focused on the tax relief available to businesses when they purchase cars, this week we turn to maximising tax relief when leasing cars for business purposes.
Up until 31 March 2013 lease costs attracted full tax relief provided the car had Co2 emissions not exceeding 160g/km. However, for leases entered into since 1 April 2013 this threshold has reduced to 130g/km.
If a leased car has emissions above this level 15% of the lease costs are disallowed for tax purposes.
Therefore, review carefully your choice of car, a small difference in the model could make a large difference to your corporation tax liability.