Capital Allowances Act 2001

Product Information

Companies within the charge to corporation tax investing in plant and machinery. General description of the measure Continuing costs could include maintaining additional records and calculating the balancing charge on disposal. The costs could increase each year as more assets are disposed but these costs will eventually flatten out. At Spring Budget 2023, the government introduced two new temporary first-year allowances. For qualifying expenditure on the provision of plant or machinery incurred on or after 1 April 2023 but before 1 April 2026, companies can claim:

These figures are set out in Table 5.1 of Autumn Statement 2023 and have been certified by the Office for Budget Responsibility. More details can be found in the policy costings document published alongside Autumn Statement 2023 Economic impact Main rate expenditure is qualifying expenditure on plant or machinery that is not special rate. Special rate expenditure is listed in Section 104A CAA01 and includes, but is not limited to, thermal insulation, integral features and long-life asset expenditure.There is no impact on individuals as this measure only affects companies. This measure is not expected to impact on family formation, stability or breakdown. Equalities impacts

The current law for capital allowances is contained within Part 2 of the Capital Allowances Act 2001 (CAA01). The rules on first-year allowances are primarily contained within Chapter 4 Part 2 CAA01 and Sections 52-52A CAA01. Chapter 5 contains provisions on pooling, disposal events and disposal values. Chapter 17 contains various anti-avoidance provisions which apply to first-year allowances.However, there are likely to be continued administrative savings for expenditure on which full expensing is claimed as businesses will no longer be required to maintain pools for such expenditure.