Talking to your clients – Capital allowances and cars

Tax is an ever changing world but some changes are more important to clients than others.

Whilst you will be aware of the technical issues it is easy to forget, and find the time, to focus on explaining these to clients. Taking extracts from our Finance Act 2012 course notes, we have prepared a series of tax tips to assist you when 'Talking to your clients' to provide proactive, responsible and timely advice therefore saving you time.

The 100% first year allowance (FYA) available on new low emission cars purchased (not leased) by a business will be revised and extended with effect from 1 April 2013. The current rule is that a 100% FYA is generally available where a car's emissions do not exceed 110gm/km until 31 March 2013. The availability of a 100% FYA is to continue for a further two years for purchases from 1 April 2013 but only where emissions do not exceed 95gm/km.

Cars with emissions between 111-160gm/km inclusive currently qualify for main rate WDA (18% from April 2012). The threshold is to be revised down to 130gm/km for additions from 6 April 2013 for income tax (1 April 2013 for companies).

Key point

Make sure clients are aware that further changes in relation to capital allowances for cars is on the horizon.