Entitlement to plant and machinery allowances

Copyright © 2025 LexisNexis
Produced by a Tolley Owner-Managed Businesses expert
Owner-Managed Businesses
Guidance

Entitlement to plant and machinery allowances

Copyright © 2025 LexisNexis
Produced by a Tolley Owner-Managed Businesses expert
Owner-Managed Businesses
Guidance
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Entitlement to capital allowances

The general rule is that capital allowances are available for ‘qualifying expenditure’ incurred by a person carrying on a ‘qualifying activity’. ‘Person’ includes both companies and individuals.

Qualifying expenditure for capital allowances

‘Qualifying expenditure’ is capital expenditure incurred on plant or machinery that is wholly or partly used in the qualifying activity carried on by the person incurring the expenditure. The person incurring the expenditure must also own the asset as a result of incurring the cost of it. Details of what constitutes a qualifying activity can be found in the What are capital allowances? guidance note.

Subsidies and capital allowances

Expenditure on a capital item which is covered by a subsidy is not qualifying expenditure. However, subsidies made by private entities will be qualifying expenditure where the donor cannot claim capital allowances on the expenditure. See ‘Contributions to expenditure’ below.

Gifts and capital allowances

Qualifying expenditure for capital allowances purposes includes deemed expenditure on plant or machinery which has been received as a gift. The recipient is treated as

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  • 25 Sep 2025 15:30

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