The following Owner-Managed Businesses guidance note by Tolley provides comprehensive and up to date tax information covering:
Three types of allowance are available for expenditure on plant and machinery:
In addition, balancing allowances and balancing charges may arise in some circumstances where assets are disposed of or the business ceases.
To compute writing down allowances, balancing allowances and balancing charges, expenditure is ‘pooled’. The different types of pools are:
CAA 2001, ss 53, 54
Writing down allowances are available for historic expenditure which has not been fully relieved and for new expenditure which is not eligible for AIA or FYA. This may be the case where, for example, the annual limit for the AIA has been exceeded or the asset is not one of the types eligible for FYAs.
For more information on calculating plant and machinery allowances generally, see Simon’s Taxes
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