Posts Tagged ‘capital allowances’

Claiming capital allowances

Posted on: April 18th, 2013 by Leighton Reed No Comments
Leighton Reed, Director, MHA Broomfield Alexander

Leighton Reed, Director, MHA Broomfield Alexander

Capital allowances provide a valuable tax deduction when businesses purchase items such machinery, equipment and computers.  They are also claimable on property fixtures, including items such as electrics, lighting, heating, water systems, kitchen and sanitary fittings.  They are therefore an important issue to consider when existing property is purchased or when money is spent on a new build, extension or refurbishment.

Claiming capital allowances is an integral part of the work we undertake when preparing tax computations.

When clients make major capital purchases we work with them to ensure that capital allowances are optimised and that they can benefit from the allowances, given our knowledge of their tax status and taking into account latest developments.

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Capital Allowances – good news and bad news…

Posted on: September 17th, 2012 by Leighton Reed No Comments
Leighton Reed, Director, MHA Broomfield Alexander

Leighton Reed, Director, MHA Broomfield Alexander

We have seen some reductions in capital allowance rates from April 2012, but it is not all bad news.  Set out below is a reminder of the good and the bad.

GOOD NEWS

100% first year allowances

These continue to be available for:

  1. Qualifying energy and water saving plant or machinery.  (See http://etl.decc.gov.uk/)  Included are items such as new energy saving boilers, refrigeration equipment, lighting, heating and water systems.
  2. New low-emission cars (either electrically propelled or with CO2 emissions not more than 110g/km).
  3. Assets used for qualifying R&D.

Short life assets

These can still be depooled and balancing allowances claimed on an individual asset basis when they are disposed of or scrapped within 8 years (previously 4) of purchase.  Computers, other technology assets and tooling are typical candidates for this treatment, but cars are not eligible.  The cost of tracking the assets needs to be weighed against the potential tax cash flow benefit.

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