A–Z of capital allowances

Produced by Tolley in association with Steven Bone of Gateley Capitus
A–Z of capital allowances

The following Owner-Managed Businesses guidance note Produced by Tolley in association with Steven Bone of Gateley Capitus provides comprehensive and up to date tax information covering:

  • A–Z of capital allowances
  • What capital allowances are available?

What capital allowances are available?

When calculating taxable profits or allowable losses for a business, it may be possible to claim capital allowances on expenditure on items which are capital in nature. There are various types of capital allowances available with the most common type being plant and machinery. To be able to claim capital allowances, the expenditure must be qualifying expenditure for the type of allowance being claimed. For some allowances, qualifying expenditure is defined by the legislation, but for others there is case law which determines whether the item is qualifying.

This schedule is an alphabetical list of items and their treatment for capital allowance purposes based on CAA 2001 and also on decided cases. The availability of any allowance will be subject to the qualifying conditions for that allowance being met and the relevant guidance note, legislation and HMRC guidance should be reviewed to confirm the position (although HMRC guidance does not have the force of law). Items in the list may also qualify for the annual investment allowance on plant and machinery. For more details, see the Annual investment allowance (AIA) guidance note.

The list is not exhaustive but a summary of the more common types of assets ― to search for an item on the page, use ‘Ctrl+F’. For a detailed discussion of the meaning of plant and machinery, see Simon’s Taxes B3.306.

Item of expenditureCapital allowance treatmentFurther details
AActive façades (inner skin only)Integral features, special rate poolSpecial rate pool and long life assets
CA22330
Advertising hoardings, signs, displays and similar assetsPlant and machinery, main rate poolCapital allowances computations
CAA 2001, s 23, List C
Air conditioning or purification systemIntegral features, special rate poolSpecial rate pool and long life assets
CA22330
Air strip unless included in CAA 2001, s 23, List C itemsStructures and buildings allowanceStructures and buildings allowance
CAA 2001, s 22, List B
Alterations to land for the purpose only of installing plant or machineryPlant and machinery, main

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