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.


Contact Us

Ledger Sparks
Airport House, Suite 43-45
Purley Way
Croydon
CR0 0XZ

Tel: 020 8781 1940
Fax: 020 8781 1889
E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

 

Online logins

 

Membership

  

   

Latest News

Information Commissioner’s Office announces new lawful basis interactive guidance tool
24/04/2018 - More...The Information Commissioner's Office...
Tax Diary May/June 2018
19/04/2018 - More...1 May 2018 - Due date for corporation...
Renewing tax credit claims
18/04/2018 - More...Families and individuals that receive...