Capital allowances on cars

Produced by a Tolley Owner-Managed Businesses expert

Owner-Managed Businesses

Guidance

Summary of capital allowances on cars

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

Pool type	Description of car	Rate	Legislation
Main rate pool	New and unused cars with CO2 emissions of 50g/km and below	18%	CAA 2001, s 104AA
Main rate pool	Secondhand cars with CO2 emissions of 50g/km and below or a secondhand electric car	18%	CAA 2001, s 104AA
Special rate pool	New or secondhand cars with CO2 emissions of more than 50g/km	6% (8% prior to April 2019)	CAA 2001, s 104A
First year allowances (FYAs)	New and unused cars with CO2 emissions of 0g/km , or car is electric	100%	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

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