Part 3Trading income

Chapter 4Trade profits: rules restricting deductions

56Car F1... hire

(1)

Subsection (2) 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 CO 2 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 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, or

(b)

is treated as a post-cessation receipt under section 193 (debts released after cessation),

is reduced by F415%.

(5)

In this section “corresponding provision” means—

(a)

section 1251(2) (car F5... hire: expenses of management), F6including as applied by section 82(4) of FA 2012, or

(b)

section 48(2) of ITTOIA 2005 (car F7... hire: trade profits and property income), F8...

F8(c)

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F9(6)

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