These are available for businesses that purchase specific types of efficient equipment; they allow 100% Capital Allowance for the first year. The equipment covered comes under four main categories:
Energy Saving Machinery, Plant, and Equipment – This includes specific energy saving models of items such as Boilers, Refrigeration Equipment, Lighting, Insulation and Motors.
Cars – This includes only cars with efficient levels of carbon dioxide emissions. The current maximum level is 120gm of Carbon Dioxide per kilometre; cars with emissions above this do not qualify for capital allowance.
Water Conserving Machinery and Equipment – This includes items such as water meters, leakage detection equipment, low flush toilets, and efficient taps.
Other costs – This includes direct transportation and installation costs, as well as some project management costs; as well as costs of altering an existing building to install energy efficient equipment.
Enhanced first year allowances are claimed in the same way as other capital allowances, through your self assessment or corporation tax return forms.
Buildings
If you construct or purchase a building within a designated Enterprise Zone, then you are allowed an Industrial Buildings Allowance of 25% a year, with most qualifying for 100% allowance in the first year.
If you construct or buy an unused building outside of these areas, there is no initial tax allowance; there is however a ‘Writing down Allowance’. This is usually 4% of qualifying costs, although this depends on the timescale and use of the building. This allowance does not apply to the costs of land, whether it is included or separate to the building costs.
Article Index:
1. First Year Tax Capital Allowances
