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Capital Allowances
- Capital allowances: Rates and allowances
- Last Updated: 05 December 2023
What different types of capital allowances are available? What are the current and past rates of allowances?
This is a freeview 'At a glance' guide to capital allowances: rates and allowances.
Capital allowances should be considered in business planning when an existing business has plant and machinery or other assets.
Capital allowances main rates
(see the left-hand menu for detailed guidance on Capital allowances)
Expenditure on plant and machinery, and structures and buildings.
|
Type |
2023-24 |
2021-22 to |
2020-21 |
2019-20 |
2017-18 to 2018-19 |
2015-16 to 2016-17 |
|
100% main rate 50% special rate |
- | - | - | - | - | |
| Super-deduction** | - |
130%/50%/100% |
- | - | - | - |
|
Annual Investment Allowance (AIA) Limit: |
100% £1 million |
100% £1 million
|
£1 million
|
100% £1 million
|
100% £200,000
|
100% 2015-16: £500,000 |
|
Writing-down allowance (WDA): general pool |
18% |
18% |
18% |
18% |
18% |
18% |
|
WDA special rate pool: including Integral features and Long life assets |
6% |
6% |
6% |
6% |
8% |
8% |
|
Small pool write off, written-down balance in either or both WDA pool(s) is £1,000 or less |
100% |
100% |
100% |
100% |
100% |
100% |
|
First Year Allowance (FYA): Electric car charging points*** |
100% |
100% |
100% |
100% |
100% |
100% from 23 November 2016 |
|
3% straight line |
3% straight line |
3% straight line |
2% straight line |
From 29/10/18 2% straight line |
- |
|
|
Limit |
100% €125 million |
100% €125 million |
100% €125 million |
100% €125 million |
100% €125 million |
100% €125 million |
|
Enhanced Capital Allowances (ECA) (energy-saving and environmentally beneficial plant and machinery) |
100% ECAs in Enterprise Zones until the later of 31 March 2021 and eight years from the date the area was designated or treated as designated |
100% ECAs in Enterprise Zones until the later of 31 March 2021 and eight years from the date the area was designated or treated as designated |
Withdrawn except in respect of Enterprise Zones |
100% |
100% |
100% |
|
Freeports (new designated sites): ECAs Super Deduction** & AIA |
100% If within expenditure limits |
100% If within expenditure limits |
||||
| Business Property Renovation Allowance | (withdrawn from April 2017) | 100% |
*In the 2023 Spring Budget, 'full expensing' was announced. From April 2023, companies incurring qualifying expenditure on new plant and machinery on or after 1 April 2023 and before 1 April 2026 will be able to claim:
- 100% First Year Allowances (FYAs) for main rate expenditure (‘full expensing’).
- 50% FYAs for special rate expenditure, including long-life assets.
In the 2023 Autumn Statement, it was announced that full expensing and the 50% FYA would be made permanent.
**The Super Deduction is available only to companies, at a rate of 130% for main rate assets, 50% for special rate assets (i.e. Fixtures and Integral Features), or 100% for assets used partly for ring-fenced trades and partly for qualifying trades (on apportionment). The Super Deduction is available for qualifying expenditure incurred between 1 April 2021 and 31 March 2023.
***Finance (No. 2) Act 2023 extends the 100% First Year Allowance for electric vehicle charge points to 31 March 2025 for Corporation Tax purposes and 5 April 2025 for Income Tax purposes.
Motor cars
|
Cars purchased from 1 April 2018/5 April 2018 |
2021-22 |
2018-19 |
|
Type |
Rate |
Rate |
|
FYA for new electric cars or new zero-emission |
100% |
100% |
| FYA if CO2 emissions are 50g/km or lower (new cars only) |
n/a |
100% |
| WDA if CO2 emissions are 50g/km or lower (includes FYA qualifying cars if FYA not claimed) |
18% |
18% |
|
WDA if CO2 emissions are between 50g/km and 110g/km |
6% |
18% |
|
WDA if CO2 emissions exceed 110g/km |
6% |
6% |
|
Purchased between April 2015 and April 2018 |
2015-16 to 2017-18 |
|
Type |
Rate |
|
FYA for new electric cars or if CO2 emissions are 75g/km or lower (new cars only) |
100% |
|
WDA (second-hand vehicles) if CO2 emissions do not exceed 130g/km |
18% |
|
WDA if CO2 emissions exceed 75g/km but do not exceed 130g/km |
18% |
|
WDA if CO2 emissions exceed 130g/km |
8% |
See Vehicles (4 wheels): Allowances
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