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ACCA Applied Skills · Taxation (UK) · Income from self-employment

Which of the following new items of expenditure by a sole trader qualifies for a 100% first year allowance?

A new car with zero CO2 emissions qualifies for a 100% first year allowance. Second-hand zero-emission cars and cars emitting 1 to 50 g/km go in the main pool at 18%, and cars over 50 g/km go in the special rate pool at 6%.

  1. AA new car with zero CO2 emissionsCorrect
  2. BA second-hand car with zero CO2 emissions
  3. CA new car with CO2 emissions of 40 grams per kilometre
  4. DA new car with CO2 emissions of 80 grams per kilometre

Explanation

Only new cars with zero CO2 emissions qualify for the 100% allowance. A second-hand zero-emission car receives 18%, a car emitting 1 to 50 g/km receives 18%, and a car over 50 g/km receives 6%.

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