Entitlement to plant and machinery allowances

Copyright © 2026 LexisNexis
Produced by a Tolley Owner-Managed Businesses expert
Owner-Managed Businesses
Guidance

Entitlement to plant and machinery allowances

Copyright © 2026 LexisNexis
Produced by a Tolley Owner-Managed Businesses expert
Owner-Managed Businesses
Guidance
imgtext

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

Continue reading the full document
To gain access to additional expert tax guidance, workflow tools, generative tax AI, and tax research, register for a free trial of Tolley+™
TAKE A FREE TRIAL NOW
Powered by Tolley+™
  • 25 Sep 2025 15:30

Home/ Tolley Tax Guidance/ Owner-Managed Businesses / Calculating trading profit and loss

Popular Articles

Owner-Managed Businesses

Trade or hobby

Trade or hobbyInteraction of hobby farming rules and commercialityFarming has its own set of ‘hobby farming rules’, which historically have stated that a profit must be made every six years. This is known as ‘the five-year rule’, in that there can be five years of losses but there must be a profit

14 Jul 2020 13:50 | Produced by Tolley Read more Read more
Employment Tax

Payroll record keeping

Payroll record keepingUnder SI 2003/2682, reg 97, “...an employer must keep, for not less than 3 years after the end of the tax year to which they relate, all PAYE records which are not required to be sent to [HMRC]...”. Reasons for keeping the records include:•being able to calculate tax and

14 Jul 2020 12:52 | Produced by Tolley in association with Ian Holloway Read more Read more
Value Added Tax

UK VAT invoice requirements

UK VAT invoice requirementsThis guidance note provides details of the information that must be shown on a valid tax invoice. Businesses supplying goods and services that are liable to the standard or reduced rate of VAT are required to issue a tax invoice to another VAT registered person.If the

14 Jul 2020 13:46 | Produced by Tolley Read more Read more