I use my car for my self-employed business – it cost £5,000*. Can I claim tax relief?
Yes – but it’s complicated – and it depends on the CO2 emissions of the car.
For cars bought after 6th April 2021:
- Second-hand electric cars, and cars with CO2 emissions over 50g/km, the tax relief (called a Writing Down Allowance) is 6% (the Special Rate) of the cost/tax value of the car per year on a reducing balance basis.
- For cars with CO2 emissions of 50g/km or less, the tax relief is 18% (the Main rate).
- For new/unused electric cars, the tax relief is 100% in the year of purchase.
Then, whatever figures are claimed are by the percentage of private use of the car.
Example – for a car purchased for £5,000 in 2024/25, with CO2 emissions of 45g/km, and used 75% for business. The Capital Allowance that can be claimed is £5,000 x 18% x 75% = £675. In the next year, the tax value of the car for calculation purposes would be reduced to £4,100 and a new calculation would need to be made.