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CAPITAL ALLOWANCES ON PLANT & MACHINERY - ALLOWANCES AND RELIEFS

Financial Yr 2019


1.4.2019 - 31.3.2020

Financial Yr 2018


1.4.2018 - 31.3.2019

Notes

Main rate of expenditure - note 1

18%

18%

The AIA investment allowance increased to £1m from 1.1.2019 until 31.12.2020 when it will revert back to £200,000.

Annual investment allowance (AIA)

£1,000,000

£200,000/£1m

Integral fixtures and fittings - note 2

6%

8%

Energy saving and water efficient products

100%

100%

Long life assets - note 3

6%

8%

Small Pools Allowance - note 4

Up to £1,000

Up to £1,000

Structures and Buildings Allowance - note 5

2%

2%


Note 1 - for non-limited companies, the allowances and reliefs are given for expenditure in tax years i.e., from 6 April to 5 April. Where the accounting period straddles 1 April or 5 April, a hybrid rate of CA is used.


Note 2 - Integrated fixtures include lifts, escalators, air-conditioning and central heating systems that form part of the building rather than productive equipment


Note 3 - long life assets are assets with a life expectancy of more than 25 years when new such as solar panels and certain items of plant and machinery.


Note 4 - where the balance remaining in the main pool or special asset pool is less than £1,000, the whole of the allowance can be claimed.


Note 5 - From 28.10.2018, CA's at 2% straight line basis will be available for qualifying non-residential structures and buildings.


CAPITAL ALLOWANCES ON MOTOR VEHICLES

F Yr 2019

F Yr 2018

Notes

Cars with CO2 emissions 50 g/km or less

100%

100%

FYA of 100% applies on new (not second hand or leased) low emission cars and electric vans. Other vans treated as plant & attract AIA or WDA

Cars with CO2 emissions - 51- 75 g/km

18%

18%

Cars with CO2 emissions - 76 - 110 g/km

18%

18%

Cars at 18% are included in the main rate pool and WDA given.

Cars at 8% are included in a special rate pool. For sole traders/partners where there is mixed use they are included in a single asset pool.

Cars with CO2 emissions - >110 g/km

8%

8%


A car is regarded as new and unused even if it has been been driven a limited number of miles for the purposes of testing, delivery, test driven by a potential purchaser, or used as a demonstration car.


For sole traders and partnerships, where there is private use, each car forms a special asset pool on its own; allowances are based on CO2 emissions and are given for expenditure in tax years i.e., from 6 April to 5 April . The allowances are restricted for private usage. Further, balancing allowances will be available, or balancing charges will apply, on disposal of the vehicle.


In the case of a special rate pool for a car in a limited company, when a vehicle is disposed off, the sale proceeds are deducted from the pool and no immediate relief is given for any balance of expenditure remaining in the pool (unless the business ceases). Instead, WDA continues to be available at 8% even though a car has been disposed off. Similarly, there is no balancing charge applicable unless the business is ceasing. This is not the case for sole traders and partnerships where balancing allowances and charges will continue to apply.

Recent Developments

Capital allowances: business cars first-year allowances (FYAs) – From 1.4.2015 to 31.3.2018 the 100% FYA will only be available to cars with CO2  emissions not exceeding 75 g/km. From April 2018 the 100% FYA will only be available to cars with CO2 emissions not exceeding 50 g/km . Also, from April 2018, the threshold for cars currently eligible for the 18% CA’s rate will reduce from 130 g/km to 110 g/km .

Capital Allowances