BUYING A NEW CAR ? what can you claim ??

The competitive deals currently available on dealers’ forecourts are tempting a number of you to consider changing your car. The tax allowances on new cars changes dramatically on 6th April 2009 and CO2 emissions affect allowances greatly.

the rules can be summarised as:

                                                                                    2008/09                       2009/10

CO2 emissions of 110 g/km or less

First Year Allowance                                                   100%                           100% 

CO2 emissions of 111-160 g/km

Writing Down Allowance                                              25%                             20%

Annual Cap  – Maximum claimable                                £3000 pa                     £16,000

CO2 emissions of over 160 g/km  

Writing Down Allowance                                               25%                             10%

Annual Cap  – Maximum claimable                                £3000 pa                     £ 8,000

RULES ON CONTRACT HIRE 

These are also changed from 6th April 2009. This particularly affects expensive cars. For example – assuming a new car costing £20,000 with emissions of less than 160 g/km can be contract hired for £5,175 including VAT.  Should you buy or lease ?? Possible allowances are:

2008/09                       2009/10

Purchase the vehicle

Writing down allowance                        £3,000                         £4,000

Or

Contract hire for £5,175pa                              

Amount Deductible                               £3,870                         £4,838

(including VAT @ 15%)

 *Note that the writing down allowance will reduce in subsequent years in line with the written down value over the vehicle’s life.

It is complex. If you are interested in a new car, ascertain all your options then we can help you pick the best one. 

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