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Tax Rates & Allowances

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Capital Allowances

Plant and machinery - Annual Investment Allowance (AIA)

The AIA gives a 100% write-off on most types of plant and machinery costs, including integral features and long life assets but not cars, of up to £25,000 p.a. (£100,000 for expenditure incurred before 6 April 2012 (1 April 2012 for companies). Special rules apply for accounting periods straddling these dates.)

Any costs over the AIA fall into the normal capital allowance pools below. The AIA may need to be shared between certain businesses under common ownership.

Other plant and machinery allowances

The annual rate of allowance is 18% (20%) from 6 April 2012 (1 April 2012 for companies). An 8% (10%) rate applies from 6 April 2012 (1 April 2012 for companies) to expenditure incurred on integral features and on long life assets. Special rules apply to accounting periods straddling these dates.

A 100% first year allowance may be available on certain energy efficient plant and cars, including expenditure incurred on new and unused zero emission goods vehicles on or after 6 April 2010 (1 April 2010 for companies).

Cars

For expenditure incurred on cars on or after 6 April 2009 (1 April 2009 for companies), costs are generally allocated to one of the two plant and machinery pools. Cars with CO2 emissions not exceeding 160gm/km receive an 18% (20%)
allowance p.a. Cars with CO2 emissions over 160gm/km receive an 8% (10%) allowance p.a. Special rules apply to accounting periods straddling 6 April 2012 (1 April 2012 for companies).