Capital Allowances

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Plant and machinery and other capital expenditure

Annual Investment Allowance

Details	Rates & thresholds
from 01/01/2016 to 31/12/2018	£200,000
from 01/01/2019 to 31/12/2021	£1,000,000
from 01/01/2022 to 31/03/2023	£200,000
A "superdeduction" at 130% of qualifying expenditure is in place for expenditure from 1 April 2021 to 31 March 2023. The superdeduction is not limited in terms of the amount of qualifying expenditure which can be included.	130%
Enterprise zone plant & machinery	100%
Plant & Machinery (reducing balance) pa	18%
A 50% first-year allowance (FYA) for speacial rate (including long life) assets until 31 March 2023 for companies	50%
Patent rights & know-how (reducing balance) pa	25%
Certain long-life assets, integral features of buildings (reducing balance) pa	6%[1]
Energy & water-efficient equipment	100%
Electric vans	100%
Structures and buildings allowance (SBA)	3%
Research and Development Allowance (RDA)	100%

Motor Cars

Corporation Tax – Expenditure on or after 01/04/2021

Income Tax – Expenditure on or after 06/04/2021


Capital allowance	100% first year	18% reducing balance pa	6% reducing balance pa
CO2 emissions of g/km:	<0 or electrically propelled	1-50	>Over 51

Corporation Tax – Expenditure on or after 01/04/2015 but before 31/03/2021

Income Tax – Expenditure on or after 06/04/2015 but before 05/04/2021


Capital allowance	100% first year	18% reducing balance pa	6% reducing balance pa1
co2 emissions of g/km:	<≤50 or electrically propelled	51-110	>>111

Corporation Tax – Expenditure on or after 01/04/2013 but before 31/03/2015

Income Tax – Expenditure on or after 06/04/2013 but before 05/04/2015


Capital allowance	100% first year	18% reducing balance pa	8% reducing balance pa1
CO2 emissions og g/km:	<95	96-130	>131

[1] 8% until April 19, 6% from 1st April 2019 for companies and 6th April 2019 for individuals.
[2] From 29 October 2018, capital allowance at a rate of 2% will be available for new qualifying non-residential structures and buildings on a straight-line basis.
[3] RDA is only due if the research and development (R&D) expenditure is related to the trade being carried on or about to be carried on. R&D related to a trade includes any expenditure which may lead to or facilitate an extension of the trade; and medical research which has a special relation to the welfare of workers employed in that trade.

Research & Development Tax Credits

	2020/21	2021/22	Note
SME enhanced deduction scheme	130%	130%	A
SME cash credit for R&D loss surrendered	14.5%	14.5%
Large company above the line scheme credit (RDEC)	13%	13%	B

[A] Additional (enhanced) tax deduction available for qualifying R&D expenditure. From 1 April 2016, the only scheme available to large companies is RDEC.
[B] Tax credit available on qualifying R&D expenditure. RDEC rate increased to 12% on qualifying expenditure incurred on or after 1 Januaray 2018. The rate was 11% prior to the change

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