Section 56 — Corporation Tax Act 2009: Car ... hire

Car ... hire 56 1 Subsection (2) applies if, in calculating the profits of a trade, a deduction is allowed 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 is reduced as a result of subsection (2), or a corresponding provision, and subsequently—

a there is a rebate (however described) of the hire charges, or b a debt in respect of any of the hire charges is released otherwise than as part of a statutory insolvency arrangement.

4 The amount that, as a result of the rebate or release—

a is brought into account as a receipt of the trade, or b is treated as a post-cessation receipt under section 193 (debts released after cessation), is reduced by 15% .

5 In this section “ corresponding provision ” means—

a section 1251(2) (car ... hire: expenses of management), including as applied by section 82(4) of FA 2012, or b section 48(2) of ITTOIA 2005 (car ... hire: trade profits and property income), ... c . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .