GB/EN

Lease Rental Restriction

Low emission cars could help reduce the cost of your fleet.

If your business pays for its business cars through a leasing agreement, you may be able to offset the cost against taxable profits.

To reduce CO2 emissions and encourage investment in ultra-low emission vehicles, such as electric vehicles, the government applies what is known as the Lease Rental Restriction (LRR).

For cars with CO2 above a certain threshold, this limits the amount businesses can offset to 85% of their monthly rental payments.

The threshold for LRR is set annually by the government. For 2020/21 tax year, it applies to company vehicles with emissions above 110g/km. From 2021/22 tax year the threshold reduces to 50g/km.

For reference, the following SEAT models are exempt:

Model

Version

 

Mii electric

All versions

 

Leon e-HYBRID

All versions