What plant purchases qualify for a tax allowance?

Source: HM Revenue & Customs | | 11/04/2018

Most day to day business expenses can be deducted from business income when calculating your taxable profits. However, the rules are different for 'capital’ expenditure'. Capital allowances is the term used to describe the allowances which allow businesses to secure tax relief for certain capital expenditure. There are different rules that apply depending on the type of capital expenditure, and only the person who bought the item can claim a capital allowance.

We will focus below on what plant and machinery purchases HMRC says qualifies for a tax allowance.

Plant and machinery includes:

  • items that you keep using in your business, including cars
  • costs of demolishing plant and machinery
  • parts of a building considered integral, known as 'integral features'
  • some fixtures, e.g. fitted kitchens or bathroom suites
  • alterations to a building to install other plant and machinery - this doesn’t include repairs

Integral features include:

  • lifts, escalators and moving walkways
  • space and water heating systems
  • air-conditioning and air cooling systems
  • hot and cold water systems (but not toilet and kitchen facilities)
  • electrical systems, including lighting systems
  • external solar shading

You can’t claim capital allowances on:

  • things you lease - you must own them
  • buildings, including doors, gates, shutters, mains water and gas systems
  • land and structures, e.g. bridges, roads, docks
  • items used only for business entertainment, e.g. a yacht or karaoke machine.


 

Latest News

Anti-money laundering rules
18/10/2018 - More...
The Money Laundering Regulations (MLR) are designed to protect the UK financial system and put in place certain controls

New style £50 note to be introduced
18/10/2018 - More...
In a joint statement issued by HM Treasury and the Bank of England it had been confirmed that the £50 note is to

Tax to pay if you exceed the annual pensions allowance
18/10/2018 - More...
The annual allowance for tax relief on pensions has been fixed at the current level of £40,000 since 6 April 2014. The

Search News


Newsletter

With our newsletter, you automatically receive our latest news by e-mail and get access to the archive including advanced search options!

» Sign up for the Newsletter
» Login

» Cookie Policy

» Privacy Policy

Social Media

twit-new