Firstly, if the car triggers a benefit in kind, then you will always be better off looking for a vehicle with low CO2 emissions, as this will result in a lower car benefit percentage and therefore a lower personal tax liability for you.
Furthermore, you should also be aware that if the car has emissions over 160g/km, it is likely that 15% of the lease payments will be disallowed for corporation tax purposes. If the emissions are below this level, the entire lease payments should be tax deductible.
However, please note that this level will reduce to just 130g/km from 6 April 2013.
By Jo Nockels
Disclaimer: The information provided is based on current guidance (at date of publication) from HMRC and may be subject to change. Any advice shared here is intended to inform rather than advise. Taxpayer's circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this information, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.