We have summarised the capital allowances applicable from 1st April 2021 as follows.<\/p>\n\n\n\n
Super-deduction<\/strong><\/span><\/p>\n\n\n\n The super-deduction is a new type of first-year allowance, providing relief of 130% on qualifying main rate plant and machinery. This is plant and machinery that would ordinarily qualify for the First-year allowances or the Main rate allowances (including the Annual Investment Allowance) with the following exceptions:<\/p>\n\n\n\n \u2022 Secondhand items. For example, a company purchasing a new \u00a310k forklift truck would be able to deduct \u00a313k from its taxable profits in the year of expenditure.<\/p>\n\n\n\n There is no limit on the expenditure that can be claimed for the super-deduction.<\/p>\n\n\n\n First-year allowances – Other<\/span><\/strong><\/p>\n\n\n\n Existing first-year allowances remain available on qualifying energy and water-efficient equipment, providing relief of 100%. This is applicable particularly for<\/p>\n\n\n\n \u2022 Qualifying secondhand assets; and For example, a company purchasing a new \u00a330k electric car would be able to deduct \u00a330k from its taxable profits in the year of expenditure.<\/p>\n\n\n\n There is no limit on the expenditure that can be claimed for first-year allowances.<\/p>\n\n\n\n Annual Investment Allowance (AIA)<\/span><\/strong><\/p>\n\n\n\n The existing AIA remains available on qualifying main rate plant and machinery, providing relief of 100%. This is applicable for the items excluded from the super-deduction, except cars that do not qualify for AIA*.<\/p>\n\n\n\n For example, a company purchasing a secondhand \u00a310k forklift truck would be able to deduct \u00a310k from its taxable profits in the year of expenditure.<\/p>\n\n\n\n There is a limit of \u00a31m on the expenditure that can be claimed for AIA. Any surplus to this can be claimed under Main rate allowances.<\/p>\n\n\n\n Main rate allowances<\/span><\/strong><\/p>\n\n\n\n The existing main rate allowances remain available, providing relief of 18% (written down each year). This is applicable for<\/p>\n\n\n\n \u2022 Qualifying plant and machinery expenditure surplus to the AIA. For example, a company purchasing a secondhand \u00a310k electric car would be able to deduct \u00a31,800 from its taxable profits in the year of expenditure, \u00a31,476 in the second year etc.<\/p>\n\n\n\n Special rate assets – 50% first-year allowance<\/span><\/strong><\/p>\n\n\n\n The 50% first-year allowance (FYA) for special rate is a new type of first-year allowance, providing relief of 50% on qualifying special rate plant and machinery. This essentially includes \u2018integral features\u2019 which would ordinarily qualify for the Special rate allowances with the following exceptions:<\/p>\n\n\n\n \u2022 Secondhand items. For example, a company purchasing a new \u00a320k electrical system would be able to deduct \u00a310k from its taxable profits in the year of expenditure.<\/p>\n\n\n\n Note, AIA can be claimed on these items and so the first-year allowance should only be claimed if the AIA limit has been reached.<\/p>\n\n\n\n There is no limit on the expenditure that can be claimed for the 50% FYA.<\/p>\n\n\n\n Special rate assets – Other<\/span><\/strong><\/p>\n\n\n\n The existing special rate allowances remain available, providing relief of 6% (written down each year). This is applicable for<\/p>\n\n\n\n \u2022 Qualifying special rate plant and machinery expenditure surplus to the AIA; and For example, a company purchasing a new \u00a320k car with CO2 emissions of 120g\/km would be able to deduct \u00a31,200 from its taxable profits in the year of expenditure, \u00a31,128 in the second year etc.<\/p>\n\n\n\n *Note, except cars, AIA can be claimed on these items and so special rate allowances should only be claimed if the AIA limit has been reached.<\/p>\n\n\n\n
\u2022 Cars.
\u2022 Transactions with connected parties; and
\u2022 Items purchased for leasing.<\/p>\n\n\n\n
\u2022 New cars with CO2 emissions of 50g\/km or less (including electric).<\/p>\n\n\n\n
\u2022 New cars with CO2 emissions between 50g\/km and 110g\/km; and
\u2022 Secondhand cars with CO2 emissions less than 110g\/km (including electric)<\/p>\n\n\n\n
\u2022 Cars.
\u2022 Transactions with connected parties; and
\u2022 Items purchased for leasing.<\/p>\n\n\n\n
\u2022 New or secondhand cars with CO2 emissions above 110g\/km<\/p>\n\n\n\n![\"\"](\"http:\/\/my-brains.co.uk\/jackross\/wp-content\/uploads\/2020\/04\/tax-planning.jpg\")
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