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 |