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 the provision of 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. For further guidance on the expression ‘on the provision of’, see the Construction projects ― building capital allowances considerations guidance note.

Subsidies and capital allowances

Expenditure on a capital item is not qualifying expenditure to the extent that it is covered by a subsidy. 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.

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+™
  • 20 Aug 2026 07:55

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

Popular Articles

Value Added Tax

Exporting goods ― proof of export

Exporting goods ― proof of exportIn addition to the requirements laid down in the Exporting goods ― overview guidance note, businesses intending to zero-rate exported goods must hold satisfactory evidence that the goods have been delivered to a destination outside of the UK. If satisfactory evidence

15 Dec 2020 14:02 | Produced by Tolley Read more Read more
Owner-Managed Businesses

Allowable deductions for employee-related expenses

Allowable deductions for employee-related expensesThis guidance note covers the tax treatment of some common types of trading expenditure relating to employees. Some of these are disallowable under general principles, for example the wholly and exclusively test or capital versus revenue expenditure.

14 Sep 2022 09:49 | Produced by Tolley Read more Read more
Personal Tax

Losses on shares set against income

Losses on shares set against incomeUsually, allowable capital losses can only be set against chargeable gains. If the losses are not fully utilised against gains in the year in which they arise, the excess is carried forward to use against future gains. See the Use of capital losses guidance note

14 Jul 2020 12:12 | Produced by Tolley Read more Read more