A–Z of capital allowances

Produced by Tolley in association with

Owner-Managed Businesses

Guidance

What capital allowances are available?

When calculating taxable profits or allowable losses for a business, it may be possible to claim capital allowances on expenditure on items which are capital in nature. There are various types of capital allowances available with the most common type being plant and machinery. To be able to claim capital allowances, the expenditure must be qualifying expenditure for the type of allowance being claimed. For some allowances, qualifying expenditure is defined by the legislation, but for others there is case law which determines whether the item is qualifying.

This schedule is an alphabetical list of items and their treatment for capital allowance purposes based on CAA 2001 and also on decided cases. The availability of any allowance will be subject to the qualifying conditions for that allowance being met and the relevant guidance note, legislation and HMRC guidance should be reviewed to confirm the position (although HMRC guidance does not have the force of law).

Items in the list may also qualify for the annual investment

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Steven Bone

Director at Gateley Capitus

Steven is a tax-qualified Chartered Surveyor who has specialised in tax incentives, including capital allowances and land remediation relief for over 20 years. Previously he held senior specialist positions in 'Big 4' and national mid-tier accountancy firms. Capital allowances underpin income tax and corporation tax calculations by giving tax relief for money spent to buy, build or alter commercial property. Steven works with owner-occupiers, investors and their advisers to provide capital allowances opinions, transaction support and specialist valuations for all types of property. This includes resolving HM Revenue capital allowances enquiries and giving expert evidence to tribunals and courts. Steven has contributed to many articles and books, including: Bloomsbury Professional's Capital Allowances, Tolley's Tax Planning, RICS's official Guidance Note for surveyors on Capital Allowances and Land Remediation Relief, and Practical Law Company's Practice Note on Commercial Property Standard Enquiry 32 dealing with capital allowances.

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