Part 16Companies with investment business
Chapter 4Rules restricting deductions
1251F5Car ... hire
C11
Subsection (2) applies if, in calculating the total profits of a company with investment business, a deduction is allowed under section 1219 for expenses incurred on the hiring of a car F2which is not—
a
a car that is first registered before 1 March 2001,
b
a car that has low CO2 emissions,
c
a car that is electrically propelled, or
d
a qualifying hire car.
C12
The amount of the deduction which would otherwise be allowable is reduced by F815%.
3
Subsection (4) applies if a deduction for expenses is reduced as a result of subsection (2) F9(including as applied by section 82(4) of FA 2012), or a corresponding provision, and—
a
subsequently—
i
there is a rebate (however described) of the hire charges, or
ii
a debt in respect of any of the hire charges is released otherwise than as part of a statutory insolvency agreement, and
b
a credit representing the rebate, or the amount released, reverses (in whole or in part) a debit representing the expenses.
4
In applying subsection (2) of section 1230 (calculation of the reversal amount for the purposes of the claw back rules)—
a
take the amount given by Step 1,
b
F13reduce that amount by 15% (instead of applying Step 2), and
c
apply Step 3 to the amount given by paragraph (b).
5
In this section “corresponding provision” means—
F7c
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F126
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7
F118
For the purposes of section 58B of this Act and section 50B of ITTOIA 2005 (connected persons: application of restrictions), this section is to be treated as if it were part of section 56 of this Act.