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The most expensive piece of equipment most small businesses use is a car, but the Government generally doesn’t allow you to claim a deduction for the full cost of a car in the year of purchase. The acquisition cost of most cars must be spread over several years using Capital Allowances, the rate of which varies depending on the vehicle’s CO2 emissions.

Cars with higher emissions qualify for a Capital Allowance deduction of 8% of the reduced cost per year, and cars with lower emissions qualify for an annual deduction of 18% of the remaining cost. The boundary between higher and lower CO2 emissions is 110g/km for cars purchased from April 2018 onwards, reduced from 130g/km for cars purchased in 2015/16 to 2017/18.

Cars with very low CO2 emissions do qualify for a 100% deduction in the year of purchase, but only if the car is brand new and unused when acquired. Very low CO2 emissions is now defined as no more than 50g/km; for cars purchased in 2015/16 to 2017/18 this threshold was CO2 emissions of 75g/km.

New electric cars qualify for 100% first year allowances. The cost of installing charging points for those electric cars also qualifies for a 100% deduction where the expense is incurred by 31 March 2019. Gas refuelling stations for vehicles also qualify for 100% allowances in the first year, if the cost is incurred by 31 March 2021.

All Capital Allowances must be claimed within the tax return for the period in which the cost was incurred, or in an amendment to that return, which can be made up to a year after the filing date for the return.

Requirement to Correct
New tax law places a requirement on the taxpayer to correct their past tax position in relation to tax due on overseas assets and transactions, rather than on HMRC to discover the facts.

If you make the correction on or before 30 September 2018, and pay any tax due, you will face the normal level of penalties (up to 100% of the tax). If the disclosure is made after that date, the penalties can be up to 200% of the tax due and, in addition, you could be subject to additional penalties based on the value of any assets which you hold overseas.

If you have any doubts about accounts you hold offshore, or deals you have made with overseas entities, now is the time to talk to us about them.

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Clarke Nicklin House, Brooks Drive, Cheadle Royal Business Park, Cheadle, Cheshire, SK8 3TD. Registered Number OC309225.
The firm is registered to carry on audit work in the UK & Ireland. Details about our audit registration can be viewed at www.auditregister.org.uk under reference number C001178544. The professional rules applicable are the Audit Regulations and Guidance which can be found at www.icaew.com/regulations, and the International Standards on Auditing (UK and Ireland) which can be found at www.frc.org.uk/apb/publications/isa.cfm.