Capital Allowances

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Plant and machinery and other capital expenditure

Annual Investment Allowance

DetailsRates & thresholds
from 01/01/2016 to 31/12/2018£200,000
from 01/01/2019 to 31/12/2021£1,000,000
from 01/01/2022 to 31/03/2023£200,000
A "superdeduction" at 130% of qualifying expenditure is in place for expenditure from 1 April 2021 to 31 March 2023. The superdeduction is not limited in terms of the amount of qualifying expenditure which can be included.130%
Enterprise zone plant & machinery100%
Plant & Machinery (reducing balance) pa18%
A 50% first-year allowance (FYA) for speacial rate (including long life) assets until 31 March 2023 for companies50%
Patent rights & know-how (reducing balance) pa25%
Certain long-life assets, integral features of buildings (reducing balance) pa6%[1]
Energy & water-efficient equipment100%
Electric vans100%
Structures and buildings allowance (SBA)3%
Research and Development Allowance (RDA)100%

Motor Cars

Corporation Tax – Expenditure on or after 01/04/2021

Income Tax – Expenditure on or after 06/04/2021

Capital allowance100% first year18% reducing balance pa6% reducing balance pa
CO2 emissions of g/km:<0 or electrically propelled1-50>Over 51

Corporation Tax – Expenditure on or after 01/04/2015 but before 31/03/2021

Income Tax – Expenditure on or after 06/04/2015 but before 05/04/2021

Capital allowance100% first year18% reducing balance pa6% reducing balance pa1
co2 emissions of g/km:<≤50 or electrically propelled 51-110>>111

Corporation Tax – Expenditure on or after 01/04/2013 but before 31/03/2015

Income Tax – Expenditure on or after 06/04/2013 but before 05/04/2015

Capital allowance100% first year18% reducing balance pa8% reducing balance pa1
CO2 emissions og g/km:<9596-130>131
[1] 8% until April 19, 6% from 1st April 2019 for companies and 6th April 2019 for individuals.
[2] From 29 October 2018, capital allowance at a rate of 2% will be available for new qualifying non-residential structures and buildings on a straight-line basis.
[3] RDA is only due if the research and development (R&D) expenditure is related to the trade being carried on or about to be carried on. R&D related to a trade includes any expenditure which may lead to or facilitate an extension of the trade; and medical research which has a special relation to the welfare of workers employed in that trade.

Research & Development Tax Credits

2020/212021/22Note
SME enhanced deduction scheme130%130%A
SME cash credit for R&D loss surrendered14.5%14.5%
Large company above the line scheme credit (RDEC)13%13%B
[A] Additional (enhanced) tax deduction available for qualifying R&D expenditure. From 1 April 2016, the only scheme available to large companies is RDEC.
[B] Tax credit available on qualifying R&D expenditure. RDEC rate increased to 12% on qualifying expenditure incurred on or after 1 Januaray 2018. The rate was 11% prior to the change

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