Capital Allowances
These are effectively depreciation for tax purposes. They allow tax payers to set
off the cost of qualifying assets against their business projects to reduce the
tax payable.
Available in many forms, Capital Allowances are available to UK tax payers. The
main forms are listed below – click on the link for more details.
Plant & Machinery Allowances
Plant & Machinery
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The most common form of capital tax relief for qualifying assets at an 18% rate
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Integral features
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A new relief from April 2008 for prescribed integrated building assets at an 8% rate
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Annual Investment Allowance
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An annual £250,000 allowance for all businesses
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Enhanced Capital Allowances
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Relief for investment in energy efficient assets
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Long Life Assets
For assets with a useful economic life of 25 years or more
Short Life Assets
For assets disposed of within 8 years
Research & Development Allowances
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Relief for investment into qualifying research and development technologies
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Industrial Building Allowances
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For expenditure incurred on an “industrial” building, structure or hotel (although this relief has now been phased out)
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Business Premises Renovation Allowances
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To encourage the regeneration of commercial property in deprived areas
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Flat Conversion Allowances
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To encourage conversion of unused space above shops to residential use. This relief is to be withdrawn from April 2013
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