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Use the Car leasing template to calculate the disallowable proportion of hire payments for leased cars. Where a hired car's CO2 emissions exceed the relevant threshold, 15% of the hire cost is disallowed for corporation tax. The template works out the disallowance for each car and adds it back to profit.
Table of contents
- When should I use this template?
- Before you start
- How does the 15% flat-rate disallowance work?
- Step 1: Add each leased car
- Step 2: Enter the lease payment
- What flows through to the rest of Corporation Tax?
- What rolls forward next year?
- Where does the data come from?
- Frequently asked questions
When should I use this template?
Use it where the company leases (hires) cars and has charged the hire payments in the accounts. The 15% restriction applies to cars with CO2 emissions above the threshold that applied when the lease began; cars at or below the threshold are not restricted.
The restriction applies to leased cars only — it does not apply to commercial vehicles, or to short-term hire in some circumstances.
Before you start
A business type must be selected in the Business type section of the Return information template. If none is selected, the template shows a warning and cannot calculate.
For each leased car you will need its registration number, its CO2 emissions figure, the date the lease started, and the net lease payment charged in the period.
How does the 15% flat-rate disallowance work?
The restriction is a flat 15% disallowance of the hire cost for cars whose CO2 emissions exceed the applicable threshold. The threshold depends on when the lease began, and has reduced over time as emissions standards have tightened:
| Lease start period | CO2 threshold (g/km) |
| From 1 April 2009 to 31 March 2013 | 160 |
| From 1 April 2013 to 31 March 2018 | 130 |
| From 1 April 2018 to 31 March 2021 | 110 |
| Post 31 March 2021 | 50 |
If a car's emissions are above the threshold for its lease period, 15% of the net lease payment is disallowed. If emissions are at or below the threshold, there is no disallowance.
Step 1: Add each leased car
Add a row for each leased car and enter its registration number, CO2 emissions (g/km), the start date of the lease, and select the lease start period. Silverfin shows the applicable CO2 threshold for that period automatically.
Step 2: Enter the lease payment
Enter the net lease payment for the car in the period. Where the car's emissions exceed the threshold, Silverfin calculates the disallowable amount as 15% of the net lease payment.
What flows through to the rest of Corporation Tax?
The total disallowable amount is added back to the income of the relevant business type as an adjustment to profit, and is tagged as an adjustment for leased cars in the iXBRL computation.
What rolls forward next year?
Car details — registration number, CO2 emissions and the lease start period (and therefore the threshold) — roll forward, so you only need to enter the current-period lease payment in the following year.
Where does the data come from?
- The car details and lease payments are entered here (car details roll forward year to year); nothing is pulled from another schedule.
- The business type comes from Return information, and the disallowable amount flows out to the adjustment of profit for that business type.
Frequently asked questions
Which threshold applies to my car?
The threshold is set by when the lease started: 160 g/km (leases from 1 April 2009), 130 g/km (from 1 April 2013), 110 g/km (from 1 April 2018) and 50 g/km (post 31 March 2021).
How much is disallowed?
A flat 15% of the net hire payment, but only where the car's CO2 emissions exceed the applicable threshold. Cars at or below the threshold are not restricted.
Does the restriction apply to all vehicles?
No. It applies to leased cars above the emissions threshold. It does not apply to commercial vehicles.