• 2022/23
• 2021/22

• Capital allowances - plant and machinery

  • The cost of purchasing capital equipment in a business is not a revenue tax deductible expense. However, tax relief is available on certain capital expenditure in the form of capital allowances.
  • Plant and machinery allowances may be available on items such as machines, equipment, furniture, certain fixtures in a building ('integral features'), computers, cars, vans and similar equipment used in a business. 
  • There are special rules for cars.
  • Plant and machinery allowances may be available to owners of commercial property which is let out to a business.
  • The Annual Investment Allowance (AIA) gives a 100% write-off on most types of plant and machinery (but not cars) up to an annual limit.
  • Writing down allowances (WDA) are given for expenditure for which AIA is not, or cannot be, claimed.
  • A Structures and Buildings Allowance of 3% may be available for qualifying investments to construct new, or renovate old, non-residential structures and buildings.

  AIA

  • Special rules apply to accounting periods straddling the dates shown in the tables below.
  • The AIA may need to be shared between certain businesses under common ownership.

  AIA limits - companies

  Expenditure incurred:	Annual limit
  	£
  From 1 January 2019 to 31 March 2023	1,000,000
  From 1 April 2023	200,000

  AIA limits - sole traders and partnerships

  Expenditure incurred:	Annual limit
  	£
  From 1 January 2019 to 31 March 2023	1,000,000
  From 1 April 2023	200,000

  Other plant and machinery allowances

  • Expenditure upon which AIA is not given/claimed will obtain relief through the 'main rate pool' or the 'special rate pool' rather than each item being dealt with separately.
  • The annual rate of WDA is 18% in the 'main rate pool' and 6% in the 'special rate pool'. 
  • A 100% first year allowance (FYA) may be available on certain cars.
  • Between 1 April 2021 and 31 March 2023, companies investing in qualifying new plant and machinery will benefit from a new FYA. A company will be allowed to claim a super-deduction of 130% on certain new plant and machinery investments that ordinarily qualify for the 18% WDA and a 50% FYA on most new plant and machinery investments that ordinarily qualify for the 6% WDA.

  Cars

  • For expenditure incurred on cars, costs are generally allocated to one of the two plant and machinery pools.
  • AIA is not available on any car but a 100% FYA may be available on certain cars. To qualify for FYA, the car must be purchased new.

  Cars acquired from April 2021

  Emissions (g/km)	Pool	Allowance
  0	Main rate	100% FYA
  ≤ 50	Main rate	18% WDA
  >50	Special rate	6% WDA

• Capital allowances - plant and machinery

  • The cost of purchasing capital equipment in a business is not a revenue tax deductible expense. However, tax relief is available on certain capital expenditure in the form of capital allowances.
  • Plant and machinery allowances may be available on items such as machines, equipment, furniture, certain fixtures in a building (' integral features '), computers, cars, vans and similar equipment used in a business.
  • There are special rules for cars.
  • Plant and machinery allowances may be available to owners of commercial property which is let out to a business.
  • The Annual Investment Allowance (AIA) gives a 100% write-off on most types of plant and machinery (but not cars) up to an annual limit.
  • Writing down allowances (WDA) are given for expenditure for which AIA is not, or cannot be, claimed.
  • A Structures and Buildings Allowance of 3% may be available for qualifying investments to construct new, or renovate old, non-residential structures and buildings.

  AIA

  • Special rules apply to accounting periods straddling the dates shown in the tables below.
  • The AIA may need to be shared between certain businesses under common ownership.

  AIA limits - companies

  Expenditure incurred:	Annual limit
  	£
  From 1 January 2019 to 31 March 2023	1,000,000
  From 1 April 2023	200,000

  AIA limits - sole traders and partnerships

  Expenditure incurred:	Annual limit
  	£
  From 1 January 2019 to 31 March 2023	1,000,000
  From 1 April 2023	200,000

  Other plant and machinery allowances

  • Expenditure upon which AIA is not given/claimed will obtain relief through the ' main rate pool ' or the ' special rate pool ' rather than each item being dealt with separately.
  • The annual rate of WDA is 18% in the ' main rate pool ' and 6% in the ' special rate pool '.
  • A 100% first year allowance (FYA) may be available on certain cars.

  Cars

  • For expenditure incurred on cars, costs are generally allocated to one of the two plant and machinery pools.
  • AIA is not available on any car but a 100% FYA may be available on certain cars. To qualify for FYA, the car must be purchased new.

  Cars acquired from April 2021

  Emissions (g/km)	Pool	Allowance
  0	Main rate	100% FYA
  ≤ 50	Main rate	18% WDA
  >50	Special rate	6% WDA