Cut to the CO2 emissions threshold from April 2021

As a response to the Government’s strategy of banning the sale of petrol, diesel and hybrid vehicles by 2035, HMRC have announced a change to the CO2 threshold rates from April 2021.

From this date:

  • The 100% First Year Allowance (“FYA”) will now only apply to the purchase of new/unused fully electric cars with 0g/km of CO2 emissions (previously up to 50g/km)
  • The main rate 18% Writing Down Allowances (“WDA”) will only be available to cars with CO2 emissions not exceeding 50g/km (down from 110g/km)
  • The special rate WDA of 6% will apply to all vehicles exceeding emission levels of 50g/km (currently above 110g/km)

In other news, HMRC has also confirmed that the FYA rules for expenditure on business cars, zero emission goods vehicles and equipment for gas refuelling stations, are being extended from April 2021 until April 2025.


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