Tax advice of the week: Get a company car

Buy a car for your business with very low emissions, and you can claim 100% of the cost of the car against tax in the year of purchase.

In the past, the government tried to "tax company cars out of existence", says Tax Tips & Advice. These days it's a "little more enlightened": the more environmentally friendly the car, the higher the tax relief.

So for cars with carbon emissions above 160g/km, your company can claim capital allowances (CAs). These are equal to just 10% of the cost of the car each year on a reducing balance basis. But if emissions are below this level, you'll get CAs at a rate of 20% (ie, after five years you'll have received tax relief on 61% of the cost).

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