Taxes Consolidation Act 1997 section 380L

Emissions-based limits for certain cars

Section 380L modifies the wear and tear allowances available under section 284 for business cars by reference to their CO2 emissions category, capping or eliminating the cost on which allowances are computed.

• Wear and tear allowances are computed not on actual cost but on a deemed cost determined by the car's CO2 emissions category — full allowance for categories A and B, partial allowance for category C, and nil for the highest-emission categories.
• Balancing allowances and balancing charges on disposal are similarly restricted, with sale proceeds scaled down in the same proportions as the original deemed cost.
• The emissions-based restrictions follow the vehicle through any subsequent sale, gift, or succession, so that no successor owner can claim allowances on a base that the original owner could not have used.
• Expenditure met, directly or indirectly, by the State or any third party is excluded from the allowable base, and from 1 January 2027 Finance Act 2024 tightens the category thresholds further.