Commentary

B3.324H First-year tax credits

Business tax
Business tax | Commentary

B3.324H First-year tax credits

Business tax | Commentary

B3.324H First-year tax credits

Before 1 April 2020, it is possible for capital allowances in respect of expenditure on energy-saving and environmentally beneficial plant or machinery (see B3.324, B3.324D respectively) to be converted into a repayable tax credit, to the extent that they give rise to a loss1. Certain restrictions apply.

Broadly, a company (and only a company) which has a 'surrenderable loss' may claim a first-year tax credit, equal to the applicable percentage of that loss, subject to an upper limit2.

For chargeable periods beginning on or after 1 April 2018 the applicable percentage is two-thirds of the corporation tax rate chargeable on the activity for the chargeable period. If there is more than one such rate then it is two-thirds of

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