Other Tax InformationCapital allowances
An additional 40% first year allowance has been introduced in respect of the balance of expenditure on qualifying plant and machinery in excess of the AIA, as referred to above, that would normally be allocated to the main capital allowances pool. This will be available for expenditure incurred in the 12 months from 1/6 April 2009. Qualifying expenditure incurred on cars on or after 1 or 6 April 2009 will now be allocated to one of the two general plant and machinery pools. Cars with CO2 emissions exceeding 160 g/km will be dealt with in the special rate pool and attract writing down allowances (WDA) at 10%. Cars with emissions of 160 g/km or less will be added to the main rate pool and attract WDA at 20%. Expenditure incurred before April 2009 will continue to be subject to the old ‘expensive’ car rules for a transitional period of around five years. Cars that have an element of non-business use will continue to be dealt with in single asset pools to enable the private use adjustment to be made, but the rate of WDA will be determined by the car’s CO2 emissions. |
For assets acquired after 1 April 2008 for limited companies or 6 April 2008 for unincorporated businesses, the first £50,000 of expenditure on plant and machinery (other than cars) qualifies for 100% relief in the year of acquisition. This is referred to as the Annual Investment Allowance (AIA). Any expenditure in excess of the £50,000 limit will enter the main capital allowances pool and will be eligible for writing down allowances (WDA's) .