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Further Information On Changes To Capital Allowances

Major changes have been made to the capital allowances system which took effect on 1st April 2008 for companies and 6th April 2008 for sole traders and partnerships. The major changes are listed below: -

Special Pool

A special pool has been introduced for building integral features such as electrical and water systems, lifts, escalators and walkways. The special pool will also be used for long life plant. A writing down allowance of 10% will be available.

Writing Down Allowance


The writing down allowance on plant and machinery and cars is reduced from 25% to 20%.

Industrial and Agricultural Building Allowances


These are being phased out over the three years to 31st March 2011 by a staged reduction in the writing down allowances

Enterprise Zone Allowances


These will continue to be available until 5th April 2011 but will then be abolished.

Low Emission Cars


These will continue to attract a 100% first year allowance until 2013.

Annual Investment Allowance


An annual investment allowance of £50,000 is available to all businesses. In effect a 100% allowance will be available on additions to the general and special pools (but not on cars) of up to that level.

Small Pool Balances


As soon as a general or special pool reduces to a level of £1,000 or below it will be possible to write it off completely.

 

The main rates of capital allowances are set out below: -

Plant, Machinery, Integral Fixtures

and Long Life Assets

2008/2009

2007/2008
Annual investment allowance

£50,000

n/a
Writing down allowance on plant & machinery

20%

25%
Small businesses first year allowance on plant & machinery

n/a

50%
Approved energy-saving plant
100%
100%
Writing down allowance on integral fixtures
10%
n/a
Writing down allowances on long life assets
10%
6%

Cars

2008/2009

2007/2008
Writing down allowance (up tp £3,000)

20%

25%
Low emission cars (up to 110g/km/120g/km)

100%

100%

Industrial Buildings, Agricultural Buildings

and Hotels

2008/2009

2007/2008
Writing down allowance (straight line)

3%

4%
First year allowance on Enterprise Zone buildings

100%

100%
Writing down allowance on Enterprise Zone buildings

25%

25%

Date of Article: 15th April 2008

Tim Warr - Warr on...
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Our website is a regulated business territory site. Whilst the information detailed here is updated regularly to ensure it remains factually correct, it does not in any way constitute specific advice and no responsibility shall be accepted for any actions taken directly as a consequence of reading it. If you would like to discuss any of the points raised and / or engage our services in providing advice specific to your personal circumstances, please feel free to contact Tim Warr on 0161 477 6789 or email us at info@warr.co.uk.