Capital allowances are a means by which a company can offset a proportion of the capital goods they buy against tax. This includes:
Plant and machinery – equipment, machinery and vehicles used in the business – eg cars, vans or lorries.
Integral features of buildings also qualify – lifts, escalators, heating systems, air-conditioning, electrical systems, including lighting systems
Fixtures in buildings – for example fitted kitchens, bathroom suites, fire alarm and CCTV systems.
The Annual Investment Allowance (AIA) and writing down allowance (WDA) effectively limit the amount that can be claimed. However if something has been used for R&D either in part or in whole then Research and Development allowances are available – where 100% of the cost can be offset against tax in the year of purchase, with no limit.
For more information on Capital Allowances and Research and Development Allowances, contact us below.