Corporation Tax Act 2009

1251F1Car ... hireU.K.

This section has no associated Explanatory Notes

(1)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.]

(2)The amount of the deduction which would otherwise be allowable is reduced by [F315%].

(3)Subsection (4) applies if a deduction for expenses is reduced as a result of subsection (2) [F4(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)[F5reduce 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—

(a)section 56(2) (car F6... hire: trade profits and property income), [F7or]

(b)section 48(2) of ITTOIA 2005 (car F8... hire: trade profits and property income), F9...

F9(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F10(6). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(7)Sections 57 (meaning of “car F11...” and other expressions) and [F1258A (short-term hiring in and long-term hiring out) ] apply for the purposes of this section as they apply for the purposes of section 56.

[F13(8)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.]

Textual Amendments

F1Words in s. 1251 heading omitted (with effect in accordance with Sch. 11 paras. 65-67 of the amending Act) by virtue of Finance Act 2009 (c. 10), Sch. 11 para. 57(9)

F2Words in s. 1251(1) substituted (with effect in accordance with Sch. 11 paras. 65-67 of the amending Act) by Finance Act 2009 (c. 10), Sch. 11 para. 57(2)

F3Figure in s. 1251(2) substituted (with effect in accordance with Sch. 11 paras. 65-67 of the amending Act) by Finance Act 2009 (c. 10), Sch. 11 para. 57(3)

F4Words in s. 1251(3) inserted (17.7.2012) by Finance Act 2012 (c. 14), Sch. 16 para. 208(2)

F5Words in s. 1251(4)(b) substituted (with effect in accordance with Sch. 11 paras. 65-67 of the amending Act) by Finance Act 2009 (c. 10), Sch. 11 para. 57(4)

F6Words in s. 1251(5)(a) omitted (with effect in accordance with Sch. 11 paras. 65-67 of the amending Act) by virtue of Finance Act 2009 (c. 10), Sch. 11 para. 57(5)

F7Word in s. 1251(5)(a) inserted (17.7.2012) by Finance Act 2012 (c. 14), Sch. 16 para. 208(3)(a)

F8Words in s. 1251(5)(b) omitted (with effect in accordance with Sch. 11 paras. 65-67 of the amending Act) by virtue of Finance Act 2009 (c. 10), Sch. 11 para. 57(5)

F9S. 1251(5)(c) and word immediately preceding it omitted (17.7.2012) by virtue of Finance Act 2012 (c. 14), Sch. 16 para. 208(3)(b)

F10S. 1251(6) omitted (with effect in accordance with Sch. 11 paras. 65-67 of the amending Act) by virtue of Finance Act 2009 (c. 10), Sch. 11 para. 57(6)

F11Words in s. 1251(7) omitted (with effect in accordance with Sch. 11 paras. 65-67 of the amending Act) by virtue of Finance Act 2009 (c. 10), Sch. 11 para. 57(7)(a)

F12Words in s. 1251(7) substituted (with effect in accordance with Sch. 11 paras. 65-67 of the amending Act) by Finance Act 2009 (c. 10), Sch. 11 para. 57(7)(b)

F13S. 1251(8) inserted (with effect in accordance with Sch. 11 paras. 65-67 of the amending Act) by Finance Act 2009 (c. 10), Sch. 11 para. 57(8)

Modifications etc. (not altering text)

C1S. 1251(1)(2) applied (with effect in accordance with s. 148 of the amending Act) by Finance Act 2012 (c. 14), s. 82(4)(5) (with s. 147, Sch. 17)