Main Capital Allowances
| Main Capital Allowances | | Motor Cars | | On reducing balance (max. £3,000 p.a. per car) | 25% | | Plant and machinery | | Small firms: | | Allowance for the first year | 50% | | Writing down allowance on reducing balance | 25% | | Medium sized firms: | | Allowance for the first year | 40% | | Writing down allowance on reducing balance | 25% | | Large firms: | | Writing down allowance only on reducing balance | 25% | | Long Life Assets | | Allowance for first year | 6% | | Writing down allowance for subsequent years on reducing balance | 6% | | Energy Saving Technology | | All firms | 100% | | Cars emitting not more than 120g/km CO2 | | Registered 17 April 2002 - 31 March 2008 | 100% | | Buildings | | Industrial buildings and qualifying hotels | 4% of building cost p.a. | | Commercial/Industrial buildings in an enterprise zone | 100% of building cost | | Agricultural buildings | 4% of building cost p.a. | | Research and Development | 100% |
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Notes
1. Capital allowances enable the cost of capital assets to be written off against taxable profits. They replace the charge for depreciation in the business accounts, which is not allowable for tax relief.
2. A small firm is defined as a business that satisfies any two of the following conditions: (a) turnover £5,600,000 or less (b) assets £2,800,000 or less (c) not more than 50 employees.
3. A medium firm is defined as a business that satisfies any two of the following conditions: (a) turnover £22,800,000 or less (b) assets £11,400,000 or less (c) not more than 250 employees.
