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

2021/22

2020/21

2019/20

2017/18 to 2018/19

2015/16 to 2016/17 

Super deduction *

130%/50%/100%

- - - -

Annual Investment Allowance (AIA) 

Limit:

100%

 

£1 million 

From 1 Jan 22: £200,000

100%

 

 

£1 million

 

100%

 

£1 million

 

100%

 

 

£200,000

 

100%

 

2015/16:£500,000
2016/17:£200,000

Writing-down allowance (WDA): general pool

18%

18%

18%

18%

18%

WDA: Integral features and Long life assets

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%

First Year Allowance (FYA): Electric car charging points

100%

100%

100%

100%

100% from 23 November 2016

Structures and Buildings Allowance (SBA)

3% straight line

3% straight line

2% straight line

From 29/10/18 2% straight line

-

Enterprise Zone

Limit

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 31/3/21 at least.

Withdrawn except in respect of Enterprise Zones

100%

100%

100%

Business Property Renovation

-

-

(withdrawn from April 2017)

 100%

Freeports (new designated sites):

ECAs 
SBAs

Super Deduction* & AIA

 

 

100%
10%

If within expenditure limits

       


* 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.

Motor cars 

Cars purchased from 1 April 2018/ 5 April 2018 

(includes cars used by sole traders or partnerships with private use in a single asset pool)

2021/22 
to
2024/25

2018/19
to
2020/21

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 (not zero)

18%

n/a

WDA if CO2 emissions are between 50g/km and 110g/km

6%

18%

WDA (second-hand vehicles) if CO2 emissions are less than 110g/km

6%

18%

WDA if CO2 emissions exceed 110g/km

6%

6%


Motor cars 

 Purchased between April 2015 and April 2018

2015/16 to 2017/18 

Type

 Rate

FYA for electric cars or if CO2 emissions are 75g/km or lower

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

Finance Act 2021

  • In an attempt to kick-start the economy post-COVID, the government announced a new Super-deduction allowance for plant & machinery. New qualifying expenditure by companies, incurred between 1 April 2021 and 31 March 2023, will receive an enhanced 130% first year allowance.
  • A 50% First Year Allowance is also introduced. 
  • Finance Act 2021 introduces a short-term measure to prevent leases, where extended due to COVID-19, from inadvertently becoming long funding leases and falling foul of the anti-avoidances measures included in the Capital Allowances Act 2001. 
  • A 100% Enhanced Capital Allowance for Freeports is to be introduced, as well as a 10% Structures and Buildings Allowance. These coincide with the announcement of the eight new Freeport sites across England (and potentially further sites across the rest of the UK).


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is it confirmed that the ECA was withdrawn in April? What tax treatment would a Tesla electric vehicle get now?

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