Section 1251 Car ... hireF13

United Kingdom

C1(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 F1which 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 F215%.

(3)

Subsection (4) applies if a deduction for expenses is reduced as a result of subsection (2) F3(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)

F4reduce 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 F5... hire: trade profits and property income), F6or

(b)

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

(c)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F9(6)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(7)

Sections 57 (meaning of “car F10...” and other expressions) and F1158A (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.

F12(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.

Annotations

Textual amendments

F1: Words 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)
F2: Figure 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)
F3: Words in s. 1251(3) inserted (17.7.2012) by Finance Act 2012 (c. 14), Sch. 16 para. 208(2)
F4: Words 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)
F5: Words 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)
F6: Word in s. 1251(5)(a) inserted (17.7.2012) by Finance Act 2012 (c. 14), Sch. 16 para. 208(3)(a)
F7: Words 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)
F8: S. 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)
F9: S. 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)
F10: Words 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)
F11: Words 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)
F12: S. 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)
F13: Words 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)

Modifications

C1: S. 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)