Capital allowances on cars

Copyright © 2026 LexisNexis
Produced by a Tolley Owner-Managed Businesses expert
Owner-Managed Businesses
Guidance

Capital allowances on cars

Copyright © 2026 LexisNexis
Produced by a Tolley Owner-Managed Businesses expert
Owner-Managed Businesses
Guidance
imgtext

Summary of capital allowances on cars

The current capital allowance rates applicable to cars are as follows:

Pool typeDescription of carRateLegislation
Main rate poolNew and unused cars with CO2 emissions of 50g/km and below14% from 1 April 2026 for corporation tax and 6 April 2026 for income tax (18% prior to these dates)CAA 2001, s 104AA
Second-hand cars with CO2 emissions of 50g/km and below or a second hand electric car
Special rate poolNew or second-hand cars with CO2 emissions of more than 50g/km6%CAA 2001, s 104A
First year allowances (FYAs)New and unused cars with CO2 emissions of 0g/km , or car is electric100%CAA 2001, s 45D

Cars do not qualify for the annual investment allowance (AIA).

A car still qualifies as being unused and not second hand if it has been driven a limited number of miles for the purposes of being delivered, tested or used as a demonstration

Continue reading the full document
To gain access to additional expert tax guidance, workflow tools, generative tax AI, and tax research, register for a free trial of Tolley+™
TAKE A FREE TRIAL NOW
Powered by Tolley+™
  • 24 Mar 2026 10:40

Home/ Tolley Tax Guidance/ Owner-Managed Businesses / Calculating trading profit and loss

Popular Articles

Personal Tax

Payment of tax due under self assessment

Payment of tax due under self assessmentNormal due dateIndividuals are usually required to pay any outstanding income tax, Class 2 and Class 4 national insurance, and capital gains tax due for the tax year by 31 January following the end of the tax year (ie 31 January 2025 for the 2023/24 tax year).

14 Jul 2020 12:52 | Produced by Tolley Read more Read more
Employment Tax

Incentives, awards and prizes

Incentives, awards and prizesIntroduction ― incentives, awards and prizesEmployers may use a variety of methods to reward and encourage employees in their work. These are commonly known as incentives, awards or prizes. For the purposes of this note, the term ‘award’ will be used to cover all

14 Jul 2020 11:57 | Produced by Tolley Read more Read more
Personal Tax

Maintenance payments

Maintenance paymentsMaintenance payments are payments made by a taxpayer to their former or separated spouse / civil partner for the maintenance of that person or their children. To obtain any tax relief for maintenance payments, one of the couple must have been born before 5 April 1935 and the

14 Jul 2020 12:12 | Produced by Tolley Read more Read more