½Û×ÓÊÓƵ

Capital allowances computations

Produced by a Tolley Owner-Managed Businesses expert
Owner-Managed Businesses
Guidance

Capital allowances computations

Produced by a Tolley Owner-Managed Businesses expert
Owner-Managed Businesses
Guidance
imgtext

Plant and machinery allowances

Three types of allowance are available for expenditure on plant and machinery:

  1. •

    the annual investment allowance (AIA), which currently provides a 100% allowance for the first £1,000,000 of expenditure per year, see the Annual investment allowance (AIA) guidance note

  2. •

    first year allowances (FYAs), which also provide a 100% allowance for expenditure, but restricted to particular types of plant and machinery this includes full-expensing on new plant and machinery by companies, see the First year allowances guidance note, and

  3. •

    writing down allowances, which provide a percentage allowance of 18% or 6% per year (18% or 8% prior to April 2019)

There is also a temporary super-deduction of 130% and FYA of 50% on qualifying new plant and machinery acquired between 1 April 2021 and 31 March 2023. For more details, see the Super-deduction and special rate first year allowance guidance note.

In addition, balancing allowances and balancing charges may arise in some circumstances where assets are disposed of or the business ceases.

To compute writing down allowances, balancing allowances and balancing

Continue reading the full document
To gain access to additional expert tax guidance, workflow tools, and tax research, register for a free trial of Tolley+â„¢
Powered by

Popular Articles

Taxation of dividend income

Taxation of dividend incomeIntroductionA dividend is a distribution of profit by a company to its shareholders.A dividend is not only a payment in cash. It can be the issue of new shares in exchange for forfeiting the right to a cash payment (a stock dividend). For more detail, see the Cash

14 Jul 2020 13:48 | Produced by Tolley Read more Read more

Premiums on the grant or surrender of a lease

Premiums on the grant or surrender of a leasePremiums on the grant of a lease ― outlineWhen a property investor grants a lease, potentially this could be done on the basis that the tenant pays a premium for the initial grant of the lease, in addition to also paying rent over the term of the lease.

14 Jul 2020 12:58 | Produced by Tolley in association with Rob Durrant-Walker of Crane Dale Tax, part of AMS Group Read more Read more

Repairs and renewals

Repairs and renewalsThe key consideration in determining whether expenditure on repairs and renewals is allowable as a deduction for tax purposes is whether it is capital or revenue in nature. In some cases, it can be relatively straightforward to identify revenue repairs. HMRC provides the

14 Jul 2020 13:23 | Produced by Tolley Read more Read more