Commentary

B3.324G Expenditure in enterprise zones—first-year qualifying expenditure

Business tax
Business tax | Commentary

B3.324G Expenditure in enterprise zones—first-year qualifying expenditure

Business tax | Commentary

B3.324G Expenditure in enterprise zones—first-year qualifying expenditure

For the latest New Development, see ND.1902.

100% first-year allowances are available to companies incurring expenditure on plant or machinery which is primarily for use in an area which, at the time the expenditure is incurred, is a designated assisted area in an enterprise zone. Originally, the expenditure had to be incurred within eight years of the date on which the area is (or is treated as) designated but this was extended so that the allowance remains available for expenditure incurred in relation to all designated assisted areas, whenever designated, until at least 31 March 2021. In addition, the following five conditions A to E need to be met1:

  1.  

    (A)     The company must be within the charge to corporation tax2

  2.  

    (B)     The expenditure must be incurred for the purposes of a trade, or a concern within ITTOIA 2005, s 12(4) or CTA 2009, s 39(4) (mines, quarries etc (see B5.651))3

  3.  

    (C)     The expenditure must be incurred for the purposes of either4:

    1.  

      (i)     a new business carried on by the company

    2.  

      (ii)     an expanded business carried on by the company; or

    3.  

      (iii)     starting up an activity which relates to a fundamental change in the product or production process of, or services provided by, a business carried on by the company

  4.  

    (D)     The plant or machinery must be unused and not second-hand5; and

  5.  

    (E)     The expenditure must not be replacement expenditure6

With effect for expenditure incurred on or after 17 July 2014 for C(iii) to apply

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