Section 1251 — Corporation Tax Act 2009: Car ... hire

Car ... hire 1251 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 which is not—

a a car that is first registered before 1 March 2001, b a car that has low CO 2 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 15% .

3 Subsection (4) applies if a deduction for expenses is reduced as a result of subsection (2) (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 reduce 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 ... hire: trade profits and property income), or b section 48(2) of ITTOIA 2005 (car ... hire: trade profits and property income), ... c . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7 Sections 57 (meaning of “car ...” and other expressions) and 58A (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.

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.