Lease Rental Restriction

Low emission cars could help reduce the cost of your fleet.

If your business pays for its business cars through a leasing agreement, you may be able to offset the cost against taxable profits through the Lease Rental Restriction (LRR).

The Lease Rental Restriction (LRR) in the UK is a tax regulation that limits the amount of tax relief businesses can claim on car lease rentals based on the CO2 emissions of the leased vehicles. The purpose of this restriction is to incentivise the use of less polluting cars.

For cars with CO₂ above a certain threshold, this limits the amount businesses can offset their monthly rental payments. The threshold for LRR is set annually by the government.

For contracts entered into from April 2021, the tax relief for leased cars is limited as follows:

For reference, the SEAT Leon e-HYBRID models qualify for 100%.