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.
100% first year allowances
These continue to be available for:
- 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.
- New low-emission cars (either electrically propelled or with CO2 emissions not more than 110g/km).
- 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.