Budget special: Company cars
The chancellor extended the 100% first-year capital allowance on company cars with low CO₂ emissions from April 2013 to 31 March 2015
However, he lowered the threshold for the relief, so it will in future be available on cars that produce less than 95g of CO₂ per km, down from 110g/km. And it will no longer be available for leased cars.
The exemption from company car taxation that currently applies for zero-carbon and ultra-low carbon emission vehicles – those that emit less than 75gCO₂/km – will cease in April 2015, when such vehicles will attract 13% tax, rising by a further 2% in 2016/17.
The “benefit-in-kind” bands for company cars will also alter from April 2014, by 1% on cars emitting more than 75gCO₂/km to a maximum of 35%, and by 2% to a maximum of 37% in both 2015/16 and 2016/17. The 3% supplement on diesel cars will end from April 2016.