A reminder of present tax reliefs for capital expenditure

Here's a quick summary of some of the current tax allowances you can claim:

Annual Investment Allowance - The Annual Investment allowance (AIA) is available to all businesses regardless of size. This AIA allows businesses to write off 100% of the cost of qualifying plant and machinery. From April 2012 it has been reduced to £25,000. Transitional rules have been put in place for businesses whose accounting periods span the operative date of the decrease.

Writing Down Allowances - For plant and machinery expenditure that exceeds the AIA and does not qualify for a First Year Allowance (see below), a standard 18% Writing Down Allowance (WDA) is available.

First Year Allowances - Where AIA is not available businesses can claim First Year Allowances (FYA) of 100% in the year they purchase certain plant or machinery. As with the AIA, this allows businesses to deduct the whole purchase cost of qualifying assets from their taxable profits. This includes:
• Low carbon dioxide emission cars
• Environmentally beneficial plant and machinery
• Renovation of business premises (disadvantaged areas)

Cars - A special 100% FYA is available for certain vehicles with low or no carbon dioxide (CO2) emissions.
Expenditure on cars with CO2 emissions over 160 grams per kilometre (g/km) driven will be dealt with in a special rate pool and will attract a Writing Down Allowance (WDA) of 8% per annum.
Expenditure on cars with CO2 emissions of 160g/km driven or less will be dealt with in the main pool and will attract a WDA of 18% per annum.
Cars that have an element of non-business use by the self-employed, must be allocated to a single asset pool to enable the private use adjustment to be made.

Disclaimer – Please note: The ideas shared with you in this article are intended to inform rather than advise. Taxpayers’ circumstances do vary and if you feel that tax strategies we have outlined may be beneficial it is important that you contact us before implementation. If you do or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.

Nigel Holmes 
Director - Corporate Tax

If you like this article and would like our FREE updates sent straight to your inbox then subscribe to our monthly newsletter


Get in touch

To find out more about how we can help you or your business, call us on 0808 144 5575 and speak to a member of our team. Alternatively use our contact form to send us a message or arrange a callback.

CALL 0808 144 5575


Contact Us

All content © 2015 Armstrong Watson. All Rights Reserved. Website by Simon Pighills.

Armstrong Watson LLP is a limited liability partnership registered in England and Wales, number OC415608. The registered office is 15 Victoria Place, Carlisle, CA1 1EW where a list of members is kept. Armstrong Watson Accountants, Business & Financial Advisers is a trading style of Armstrong Watson LLP. Armstrong Watson LLP is regulated by the Institute of Chartered Accountants in England and Wales for a range of investment business activities.

Armstrong Watson Audit Limited is registered to carry on audit work in the UK and Ireland by the Institute of Chartered Accountants in England and Wales. Registered as a limited company in England and Wales No. 8800970. Registered office: 15 Victoria Place, Carlisle, CA1 1EW

Armstrong Watson Financial Planning Limited is authorised and regulated by the Financial Conduct Authority. Firm reference number 542122. Registered as a limited company in England and Wales No. 7208672. Armstrong Watson Financial Planning & Wealth Management is a trading name of Armstrong Watson Financial Planning Limited. Registered Office: 15 Victoria Place, Carlisle, CA1 1EW