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
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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 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.

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  • 20 Aug 2026 07:55

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