The much awaited changes to the rental allowances his been unveiled. The old system which worked soley on the cost of the car meant that cars costing under £12000.00 were the most tax efficient allowing 100% of the rentals paid to be offset against corporation tax.
From April 2009 this has been revised to a C02 based system, cars with a C02 output of less than 160 GPKM will attract 100% allowances and vehicles over 160 GPKM have a 15% disallowance. If the motor manufacturers keep going with the program of C02 reduction, even the more expensive vehicles will benefit from this new system.