Business
100% first-year allowances on new zero-emission cars
A business that buys a new zero-emission car can usually write the cost down in year one. Leasing is different.
7 minute read · Updated 2026-08-14
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Business
Sourced from GOV.UK, HMRC or DVLA — not a forum screenshot.
Buy versus lease
If the limited company (or a sole trader using the car for the trade) buys a new zero-emission car, first-year allowances can let the full cost hit the tax computation in year one.
A contract-hire payment is usually a deductible expense instead, with VAT recovery rules that depend on private use. Do not mix the two in your head.
Questions
Does this apply to a personal car?
No. It is a business tax relief.