A person who is engaged in qualifying activities can claim capital allowances on its qualifying expenditure on plant and machinery.
Qualifying expenditure = capital expenditure on items of plant and machinery, this includes expenditure on the alteration of land for the purpose only of installing plant or machinery.
Expenditure which does not qualify for allowances
Expenditure on buildings, structures and land, as well as expenditure on assets which are incorporated into buildings do not qualify for capital allowances.
Assets treated as buildings:
1. Walls, floors, ceilings, doors, gates, shutters, windows and stairs.
2. Mains services, and systems for water, electricity and gas.
3. Waste disposal systems.
4. Sewerage and drainage systems.
5. Shafts or other structures in which lifts, hoists, escalators and moving walkways are installed.
6.Fire safety systems.
Assets treated as structures:
1. A tunnel, bridge, viaduct, aqueduct, embankment or cutting.
2. A way, hard standing, pavement, road, railway, tramway, vehicle park, airstrip or runway.
3. An inland navigation: canal, basin, or navigable river.
4. A dam, reservoir or barrage, including any sliuces, gates, generators or other equipment asssociated with it.
5. A dock, harbour, wharf, pier, marina or jetty or any other structure in or at which vesssels may be kept, or mechandise or passengers may be shipped or unshipped.
6. A dike, sea wall, weir or drainage ditch.
7. Any structure not within 1.-6. other than:
- A structure within the industrial building rules.
- A structure for the extraction/processing/distribution of gas.
- A structure used in the trade of telecoms, TV or radio services.
Expenditure on the construction or acquision of a structure is treated as being part of the cost of the structure.
Certain expenditure is covered by particular rules which ensures that it is not treated as relating to buildings or structures
These apply to:
- Thermal insulation of buildings
- Safety at sports grounds
- Personal security
- Integral features
- Software and rights to software
- Certain film expenditure
These assets have their own special rules for capital allowances.
General list: assets which are plant and machinery
Key note: several items that were on this list were moved by FA 2008 into integral features, these include an electrical system, a cold water system, heating and solar.
1. Machinery (including devices for providing motive power) not within any other item in this list. Note: under this heading comes assets such as vans, trucks, motorcycles, trains, tracked and wheeled machinery).
2. Gas and sewerage systems
provided mainly—
(a) to meet the particular requirements of the qualifying activity, or
(b) to serve particular plant or machinery used for the purposes of the qualifying activity.
3. Space or water heating systems; powered systems of ventilation, air cooling or air purification; and any floor or ceiling comprised in such systems.
4. Manufacturing or processing equipment; storage equipment (including cold rooms); display equipment; and counters, checkouts and similar equipment.
5. Cookers, washing machines, dishwashers, refrigerators and similar equipment; washbasins, sinks, baths, showers, sanitary ware and similar equipment; and furniture and furnishings.
6 Hoists.
7. Sound insulation provided mainly to meet the particular requirements of the qualifying activity.
8.Computer, telecommunication and surveillance systems (including their wiring or other links).
9. Refrigeration or cooling equipment.
10. Fire alarm systems; sprinkler and other equipment for extinguishing or containing fires.
11. Burglar alarm systems.
12. Strong rooms in bank or building society premises; safes.
13. Partition walls, where moveable and intended to be moved in the course of the qualifying activity
14. Decorative assets provided for the enjoyment of the public in hotel, restaurant or similar trades.
15. Advertising hoardings; signs, displays and similar assets.
16. Swimming pools (including diving boards, slides and structures on which such boards or slides are mounted).
17. Any glasshouse constructed so that the required environment (namely, air, heat, light, irrigation and temperature) for the growing of plants is provided automatically by means of devices forming an integral part of its structure.
18. Cold stores.
19. Caravans provided mainly for holiday lettings.
20. Buildings provided for testing aircraft engines run within the buildings.
21. Moveable buildings intended to be moved in the course of the qualifying activity.
22. The alteration of land for the purpose only of installing plant or machinery.
23. Dry docks.
24. Any jetty or similar structure provided mainly to carry plant or machinery.
25. Pipelines or underground ducts or tunnels with a primary purpose of carrying utility conduits.
26. The provision of towers to support floodlights.
27. Any reservoir incorporated into a water treatment works, or any service reservoir of treated water for supply within any housing estate or other particular locality.
28. Silos provided for temporary storage, or storage tanks.
29. Slurry pits or silage clamps.
30. Fish tanks or fish ponds.
31. Rails, sleepers and ballast for a railway or tramway.
32. Structures and other assets for providing the setting for any ride at an amusement park or exhibition.
33. Fixed zoo cages.
Specific trades and professions
Property letting exclusions:
Plant and machinery for use in a dwelling house, is not qualifying expenditure if the qualifying activity is: property letting, or overseas letting or, special leasing of plant and machinery (section 35 CAA 2001).
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