A 100% first year capital allowance (FYA) is available on new low emission cars purchased by a business. The current rule is that a 100% FYA is generally available where a car’s emissions do not exceed 110gm/km. The availability of a 100% FYA is to continue for purchases as follows:
- for the two years from 1 April 2013 to 31 March 2015 but only where emissions do not exceed 95gm/km and then
- for a further three years from 1 April 2015 to 31 March 2018 but only where emissions do not exceed 75gm/km.
Cars with emissions between 111-160gm/km inclusive currently qualify for main rate Writing Down Allowance (18%). The threshold is to be revised down to 130gm/km for additions from 6 April 2013 for income tax (1 April 2013 for companies).