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Lease rental restriction

From April 2018 — based on CO₂ emissions

For contracts entered in to from April 2018 tax relief for leased cars will be limited according to the CO₂ emissions as follows:

CO₂ emissions Allowed rentals Disallowed rentals
110 g/km or below 100% 0%
Above 110 g/km 85% 15%

For corporation tax purposes the thresholds noted above apply for cars leased on or after 1 April 2018. For income tax purposes the thresholds apply for cars leased on or after 6 April 2018.

From April 2013 to March 2018 – based on CO₂ emissions

For contracts entered in to between April 2013 and March 2018, tax relief for leased cars is will be 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%

Pre April 2009 – expensive car leasing disallowance

The previous legislation will apply until the end of the contract for cars leased prior to April 2009. A proportion of the lease rental is disallowed using the formula:

½ (Retail price − £12,000)
Retail price