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
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 Capital allowances ― introduction 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

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+™
  • 07 Aug 2025 08:20

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

Popular Articles

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
Corporation Tax

Computation of corporation tax

Computation of corporation taxCompanies pay corporation tax on the taxable total profits (TTP) generated in a chargeable accounting period (CAP).To ascertain whether the entity is within the charge to corporation tax, see the Charge to corporation tax guidance note.For more information on the type

14 Jul 2020 11:16 | Produced by Tolley Read more Read more
Employment Tax

Non-business expenses

Non-business expensesIntroductionIn order for an expense to be tax deductible it must be incurred because of an employee’s employment. Any non-business related expense is, therefore, not relievable except in some very particular circumstances.This guidance note deals with three separate issues. The

14 Jul 2020 12:16 | Produced by Tolley Read more Read more