Budget 2008 - Business Allowances & Incentives

Business Expansion Scheme (BES)

The requirement that recycling companies must have received grant assistance before availing of the Business Expansion Scheme (BES) is to be replaced by a requirement that their business proposals must be certified by an industrial development agency or County Enterprise Board before they avail of the scheme. As the BES is an approved State aid, it will be necessary to advise the European Commission of this proposed change.

Extension of S481 Film Relief

The current provisions in relation to the tax relief for investment in films are due to terminate on 31 December 2008. The scheme will be renewed for another 4 years to 31 December 2012. Any revisions that may be necessary to the scheme will be provided for in the Finance Bill 2008.

Capital allowances and expenses for business cars

A revised scheme for capital allowances and leasing expenses for cars used for business purposes is being introduced. The revision will link the availability of such allowances and expenses to the CO2 emission levels of the vehicles. Cars will be categorised by reference to CO2 emissions with the emissions bands being broadly consistent with the new VRT system, as follows:

Category A Vehicles	Category B/C Vehicles	Category D/E Vehicles	Category F/G Vehicles
0 - 120 g/km	121 - 155 g/km	156 - 190 g/km	191 g/km +

Cars with CO2 emission levels in Category A/B/C above will benefit from capital allowances at the current car value threshold under the existing scheme of €24,000, regardless of the cost of the car. Cars in Category D/E will receive allowances of 50% of the current car value threshold or 50% of the cost of the car, if lower. Cars in Category F/G will not qualify for capital allowances.

Leasing Expenses

Cars in Category A/B/C above will benefit from a proportionately higher deduction than the actual leasing expenses where the cost of the car is less than €24,000. Cars in Category D/E will get 50% of the leasing expenses they would otherwise benefit under the current scheme. Cars in Category F/G will not qualify for a deduction for leasing expenses.

The revised scheme will come into effect in respect of cars purchased or leased on or after 1 July 2008.