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Capital Allowances - Qualifying Assets

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Capital allowances on plant and machinery

Items that qualify for plant and machinery allowances

Tools, machinery, vehicles and other equipment you buy for your business will generally qualify for plant and machinery allowances.

Some common examples include:

  • vans
  • cars
  • tools
  • furniture
  • computers
  • machinery
  • equipment

However, different assets may be eligible for different plant and machinery allowances.

There are also certain fixtures in buildings, and integral features in buildings, that qualify for plant and machinery allowances. Find out more in our guide below.

 

Qualifying rules for plant and machinery allowances

In order to qualify for plant and machinery allowances, all the following must apply:

  • You must have incurred capital expenditure on the provision of plant and machinery that is used wholly or partly for the purposes of your business. You must own the asset in question as a result of incurring that expenditure.
  • The asset must not be something you buy and sell by way of your trade, although you might eventually sell it for some other reason - you may then have to make an adjustment to your capital allowances. The asset must also not get used up in producing what you sell or supply by way of your trade.
  • The asset must be expected to last for more than two years.

In most cases, you cannot claim capital allowances for assets you lease from someone else. You may be able to claim certain capital allowances for assets that you own and lease out to other users as part of your business, but only in very particular circumstances.

If you partly use an asset for non-business use - eg for private use - you can still claim capital allowances on the business use of the asset. The allowances you claim must be reduced by the amount arising out of your non-business use so that only the business use proportion is taken into account.