Part 2Trading income

Chapter 4Trade profits: rules restricting deductions

Car or motor cycle hire

48Car F1... hire

(1)

This section applies if, in calculating the profits of a trade, a deduction is allowed 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 F4a deduction is reduced as a result of subsection (2), or a corresponding provision, and subsequently—

(a)

there is a rebate (however described) of the hire charges, or

(b)

a debt in respect of any of the hire charges is released otherwise than as part of a statutory insolvency arrangement.

(4)

The amount that, as a result of the rebate or release—

(a)

is brought into account as a receipt of the trade F5..., or

(b)

is treated as a post-cessation receipt under section 249 (debts released after cessation),

is reduced by F615% .

F7(4A)

In this section “corresponding provision” means—

(a)

section 56(2) of CTA 2009 (car F8... hire: trade profits and property income), F9 or

(b)

section 1251(2) of CTA 2009 (car F8... hire: expenses of management), F10 including as applied by section 82(4) of FA 2012. F11...

F11(c)

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F12(5)

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