Company cars and capital allowances: which field your car goes in

Short version. A car never gets the Annual Investment Allowance, so a car purchase takes one of two routes. A new, unused car within the low-emission limit for its purchase date (fully electric today, and a low CO2 band in earlier years) gets a 100% first year allowance: enter its full cost in the 100% allowance field, once, and we report both the claim and the cost in the right boxes. Every other car gets a writing down allowance that you compute, in the main pool or the special rate pool depending on its CO2 band, and for that route you also tell us what the car cost in the added-to-pool fields, because the return reports cost separately from the allowance. A car claimed at 100% never goes in the added-to-pool fields.

Cars never qualify for AIA

The law is blunt on this point: cars never qualify for the Annual Investment Allowance, whatever they cost and however they are fuelled. The exclusion is written into the legislation (CAA 2001, section 38B), and HMRC states it in its Annual Investment Allowance guidance. A £9,000 petrol hatchback and a £90,000 electric SUV are excluded equally.

Vans and other commercial vehicles are different. A van, a lorry or a pick-up built to carry loads is not a car for this rule, and it does qualify for AIA. If your company bought a van, claim it in the Annual Investment Allowance field as normal.

The AIA row in the wizard carries a hint reminding you that cars are excluded. If you are about to type a car purchase into that field, stop and use the fields described below instead. An AIA claim that is over the limit for your dates is refused, not capped, so a car in the wrong field can also block your filing for an unrelated-looking reason.

Which pool your car is in

A car that does not get the 100% zero-emission allowance earns a writing down allowance instead, a percentage of the pool it sits in. Which pool depends on the car’s CO2 emissions and on when the company bought it:

At or under the threshold for your purchase date means the main pool. Over it means the special rate pool. The main pool rate is 18% a year for periods ending before 1 April 2026 and 14% a year from then on, with a hybrid rate for a period that straddles the change. The special rate pool is 6% a year now, and it was 8% a year for periods before April 2019. HMRC’s business cars guidance has the full table, including the older bands.

New low-emission cars: the 100% first year allowance

A car that is new and unused and within the low-emission limit for its purchase date gets a 100% first year allowance. Under current HMRC guidance the relief covers expenditure up to 31 March 2027, as set out in HMRC’s first year allowances guidance. We file the claim you enter for any period and do not confirm that the car qualifies, so check your purchase date against that guidance before you claim. The emission limit has stepped down over the years, so it depends on when the company bought the car:

Enter the full cost in the 100% allowance field and the whole amount comes off your taxable profit this period. The field is labelled “New zero-emission cars, 100% allowance” for current periods and “New low-emission cars, 100% allowance” for periods that ended before April 2021, when the wider limits applied.

This field only supports claiming the full 100%. The law lets you claim less than the whole available allowance and add the remainder to the main pool instead (HMRC’s own example: a £50,000 car, a £30,000 first year allowance claim and £20,000 added to the pool), but this product does not offer that partial claim. The figure you enter here is used as the deduction, the allowance box for your dates (726, or 725 for the periods described below) and the box 760 disclosure together, which is only correct when it equals the whole cost. If you want to claim less than the full 100% on a qualifying car, use an accountant for that return.

We put the claim in the right boxes for your dates. For most periods the allowance goes in box 726. For a period that ended before April 2021, or one starting on or after 1 April 2026, the return has no box for it, so we include it in the other allowances box (725), which HMRC defines as allowances not included in another box in this section. It is never the main pool: HMRC excludes the cost of anything claimed at 100% from the pool’s own figures, so a fully-claimed car cannot also sit in the main pool box. In every case the car’s cost is disclosed in box 760, the first-year-allowance expenditure box. You enter the cost once and we place it.

One caution for a period that spans April 2021. For those dates the field takes fully electric cars only, as its label says. A lower-emission but not electric car bought before April 2021 in such a period can still qualify under the older 50g/km limit, but placing it correctly needs the purchase date, which we do not collect, so ask an accountant for that one claim.

A used electric car does not qualify. It gets the main pool writing down allowance instead. A used £20,000 electric car in a period ending before 1 April 2026 gives a £3,600 writing down allowance at 18%, not a £20,000 deduction, so the difference between new and used matters far more for an electric car than for any other purchase.

Hybrids are not zero-emission. A hybrid has tailpipe CO2, so from April 2021 it goes into a pool by its band like any other car. Only in the earlier windows in the table could a low-CO2 hybrid qualify. Vans, electric or not, are not cars at all for these rules, and they take the Annual Investment Allowance.

How to enter it in SimpleCompanyTax

Everything for a car sits in the Tax adjustments step of the wizard. The “Annual Investment Allowance claimed” row is never for cars. Instead, select “+ Add a writing down allowance or an electric car claim”, which reveals three fields: “Writing down allowance, main pool”, “Writing down allowance, special rate pool” and “New zero-emission cars, 100% allowance”.

For a writing down allowance, you compute the figure from your own pool records and we file it. The pool is the car’s cost plus any unrelieved balance brought forward from earlier years, and the claim is that pool multiplied by the rate for your dates.

Worked example. The company buys a £15,000 petrol car with CO2 of 45g/km in June 2025. That is at or under the threshold for its purchase date, so the car joins the main pool. You report the £15,000 in the added-to-pool fields described in the next section. If the £15,000 is the whole pool, an 18% claim in a period ending before 1 April 2026 is £2,700, and that £2,700 is what you enter in “Writing down allowance, main pool”.

Telling us what the car cost

The computation identifies the first-year car allowance within your total capital allowances. This is an “of which” disclosure, not a second deduction. See the mixed-allowance example and tagging guidance.

This section is for cars on the writing down allowance route only. A car claimed at 100% in the first year allowance field is already fully reported: that field’s figure is both the claim and the cost, and we disclose the cost in box 760 for you. Do not enter it again in the added-to-pool fields, because it was never added to a pool.

For a pool-route car, select “+ Report what the company added to its pools this period”, which reveals “Added to the main pool this period”, “Added to the special rate pool this period” and “Of which is cars”.

These fields report cost only. They change no tax. HMRC asks what the company spent on each pool during the period as a disclosure, separate from what it claimed, so you report an addition whether or not you claim a writing down allowance on it this year. Buying a car late in the period and holding the claim over to next year still means reporting the cost now.

Which CT600 boxes cars end up in

The allowance side: the 100% first year allowance goes in box 726 for most periods, and into the other allowances box 725 for a period that ended before April 2021 or starts on or after 1 April 2026. Never use box 705, which is the main pool and does not carry a fully claimed 100% allowance. The main pool writing down allowance goes in box 705 and the special rate writing down allowance in box 695.

The cost side has two rules. A first-year-allowance car’s cost is disclosed in box 760, taken from the 100% allowance field itself. And HMRC reserves box 770 for special rate spending such as integral features, solar panels and long-life assets, with its notes saying special rate cars do not belong there. So when your special rate additions include a car, we use your “Of which is cars” figure to report the car’s cost in box 775 instead. You enter the costs once and we handle the split.

Common questions

“I bought a used Tesla.” No 100% allowance, because the car is not new and unused. It is fully electric, so it sits in the main pool, and you claim the main pool writing down allowance on it.

“My car is a plug-in hybrid.” A hybrid has tailpipe CO2, so from April 2021 it cannot take the 100% allowance. Check its official CO2 figure against the pool table above for your purchase date: at or under the threshold means the main pool, over it means the special rate pool. A NEW hybrid bought before April 2021 at or under the first year allowance limit for its date can take the 100% claim instead.

“I bought a £40,000 diesel at 160g/km.” That CO2 figure is over the threshold for every purchase date in the table, so the car is in the special rate pool, where the rate is 6% a year now, and it was 8% a year for periods before April 2019. A full year’s writing down allowance on the £40,000 at 6% is £2,400, and that is a yearly percentage, not a first year allowance. Report the £40,000 in “Added to the special rate pool this period” and again in “Of which is cars”, so the cost reaches the right box.

“I sold the company car.” Selling an asset you claimed capital allowances on can trigger a balancing charge, which claws back part of the relief. See balancing charges when you sell an asset for how to work it out and where to enter it.

What we do not work out for you, and why

We do not maintain your capital allowance pools and we do not compute your writing down allowance. A pool is a running record that spans every year of the company’s life, carrying balances between returns and adjusting for each purchase and sale, so it belongs with your own workings rather than inside a single year’s filing. You bring us the computed claim and we file it, with the right rate checks for your dates.

Three places to get the figure from:

• Last year’s tax computation, which shows the closing pool balances you carry forward into this period.
• GOV.UK’s rates and pools guide, which sets out the current rates and how to work out the hybrid rate for a period that straddles 1 April 2026.
• An accountant, especially for a fleet, a part-exchange or a pool with years of history.

Related fields and articles

• Capital allowances: what to enter, the wider article covering AIA, fixtures and every allowance field.
• Balancing charges when you sell an asset, for the year you sell or scrap the car.
• Why we cannot work out your Corporation Tax, if a message has replaced your Corporation Tax estimate.

This article is general guidance, not tax advice. Whether a particular vehicle counts as a car, and which pool it belongs in, can involve judgement. If you are unsure, check GOV.UK or speak to an accountant.