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 FAQ #25
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Save Tax by driving a C4?
This is especially of interest to anyone who is (like me) self employed, and it's one of the main reasons I've ordered a C4 1.6 HDi VTR+ with the EGS gearbox.

Gordan Brown must have slipped up, because if you buy a car whose CO2 emissions are 120g/km or less, you can claim the whole cost of the car against your income tax in the year you buy it. OK there is a small catch, if you already have a car which you claim capital allowances for (as opposed to a mileage "allowance") you can only claim the difference between what you get for the old car and the total cost of the new one, but it's still well worth while. If you're a 40% taxpayer It effectively means you can have a brand new car for the cost - in terms of depreciation - of a secondhand one.

This green "concession" from HMRC only lasts until April 2008, although things could change in the budget. I have already taken advantage of this once before in 2004, and currently run a Renault Megane 1.5DCi Dynamique 80bhp, which is now 3 years old, out of warranty, and starting to show signs of wear.

The interesting thing is that until the C4 EGS came along the Megane with the 1.5 DCi was the only car of this size to sneak in under the 121g/km limit. In fact many smaller diesel superminis still fail to do so. The Megane has been a good car, with few problems, good mpg (long term average 53mpg mostly on long fast runs - I do 20k+ a year. It's a lot quicker on the road than it's 80bhp would suggest thanks to the usual diesel virtue of bags of torque, so I'm really looking forward to getting a 110bhp C4 with even more torque and similar consumption.

Since the chancellor is paying for a good chunk of the car, I've specced it up with leather, bluetooth and security glass, and after I 've run the car for a few weeks I'll post a road test for the benefit of anyone thinking along similar lines.

Oh and by the way, the low CO2 qualifies you for low £50/year road tax, and if you travel in London for your sins it'll be exempt from the congestion charge from next year too!!

I'm not an accountant, or finance guy of any description, but full details of this tax break are on the HMRC website - Click Here - It's surprising how many accountants don't seem to know about this, so maybe yours doesn't.?
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Info Created: 18 March 2007
Last Updated: 27 November 2011