2016 No. 984

Corporation Tax
Income Tax

The Capital Allowances Act 2001 (Cars Emissions) Order 2016

Made

Laid before the House of Commons

Coming into force

The Treasury make the following Order in exercise of the powers conferred by sections 45D(1A) and (7) and 104AA(5) of the Capital Allowances Act 20011.

Citation and commencement

1

This Order may be cited as the Capital Allowances Act 2001 (Cars Emissions) Order 2016 and comes into force on 1st November 2016.

2

The amendments made by article 4(b) and article 5 have effect in relation to expenditure incurred on or after 1st April 2018.

Amendment of the Capital Allowances Act 2001

3

The Capital Allowances Act 2001 is amended as follows.

4

In section 45D—

a

in subsection (1)(a)2 for “2018” substitute “2021”; and

b

in subsection (4)3 for “75” substitute “50”.

5

In section 104AA(4)4 for “130” substitute “110”.

Revocation6

Article 4(a) of the Capital Allowances Act 2001 (Extension of first-year allowances) (Amendment) Order 20155 is revoked.

Stephen BarclayDavid EvennettTwo of the Lords Commissioners for Her Majesty’s Treasury
EXPLANATORY NOTE

(This note is not part of the Order)

This Order amends sections 45D and 104AA of the Capital Allowances Act 2001 (c.2). These sections set out the conditions to qualify for 100% first-year allowances (section 45D) and main rate allowances (section 104AA) on expenditure in respect of cars with low carbon dioxide emissions.

Article 4 extends the first-year allowance for cars with low carbon dioxide emissions for a further three year period ending on 31st March 2021. It also reduces the qualifying emissions threshold for the first-year allowance from 75 grams to 50 grams per kilometre driven, in relation to expenditure incurred on or after 1st April 2018.

Article 5 reduces the qualifying emissions threshold for the main rate allowance from 130 grams to 110 grams per kilometre driven, in relation to expenditure incurred on or after 1st April 2018.

This Order revokes article 4(a) of S.I. 2015/60, which previously amended section 45D(1)(a) of the Capital Allowances Act 2001.

A Tax Information and Impact Note covering this instrument will be published on the website athttps://www.gov.uk/government/collections/tax-information-and-impact-notes-tiins.