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What are qualifying activities for capital allowances purposes?

Qualifying activities are:

  • A trade, profession or vocation.
  • A property business (UK or overseas).
  • A Furnished Holiday Lettings business (UK or within the European Economic Area).
  • An employment or office.
  • Special leasing of plant and machinery.
  • Managing the investments of a company with investment business.
  • A concern in mines, quarries or sundry other undertakings listed in ITTOIA 2005 s.12(4).

Expenditure for use in a dwelling house

Capital allowances can be claimed on plant and machinery used in some types of dwelling houses. See Dwelling house for capital allowances for more information.

Officeholders and employees

Where the qualifying activity is an employment or office, no capital allowances may be claimed on expenditure on motor vehicles and cycles.

The plant or machinery must be necessarily provided for use in performing the duties of the employment or office. 

Mixed-use assets

Capital allowances can be claimed for assets that are used for qualifying activities and for private purposes, subject to a restriction for the private use which is worked out on any reasonable basis.

Useful guides on this topic

Plant & machinery: Allowances
What are the capital allowances on plant and machinery? How do you calculate them? What are the qualifying activities?

What expenditure qualifies for plant & machinery allowances?
What expenditure qualifies as plant and machinery? What is treated as part of a building? What is excluded?

Case law

In Hora Tevfik v HMRC [2019] TC07383, the First Tier Tribunal denied claims for capital allowances on the communal areas of HMO properties. The claims made were described as relating to communal, common parts, installations and shared areas but with no split between the different elements. Although invited to do so by HMRC, Mr Tevfik did not revise his claims so as to relate to common parts of the buildings only.


Capital Allowances Act (CAA) 2001 section 15

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