Owner-Managed Businesses

First year allowances

Produced by Tolley
  • 22 Dec 2021 21:31

The following Owner-Managed Businesses guidance note Produced by Tolley provides comprehensive and up to date tax information covering:

  • First year allowances
  • Low emission cars
  • Zero-emission goods vehicles
  • Electric vehicle charging points
  • Gas refuelling stations
  • New assets in designated assisted areas (within enterprise zones)
  • New assets in tax sites in a freeport
  • First year tax credits (FYTC)
  • Repayable credits

First year allowances

First year allowances (FYAs) are available on the following items:

  1. new and unused cars with low CO2 emissions, or car is electric

  2. new and unused zero-emission goods vehicles

  3. new electric vehicle charging points

  4. gas refuelling stations

  5. expenditure on new plant or machinery which qualifies as a special rate asset and is incurred on or after 1 April 2021 and before 1 April 2023 (companies only), see the Super-deduction and special rate first year allowance guidance note

  6. plant and machinery for use primarily in an area which is a designated assisted area in an enterprise zone (companies only)

  7. plant and machinery for use primarily in an area which is a designated tax site in a freeport (companies only)

These are detailed further below.

First year tax credits were abolished from April 2020, although there is still a four-year clawback period.

Low emission cars

The amount of capital allowances available for cars are based on levels of CO2 emissions, as established at manufacture.

From 1 April 2021, the limit is 0g/km. From 1 April 2018 to 31 March 2021, the limit was 50g/km.

Please refer to the Capital allowances on cars guidance note for further commentary.

Zero-emission goods vehicles

FYAs at a rate of 100% are available for expenditure incurred on new goods vehicles which do not emit any CO2 when driven.

Expenditure qualifies for FYAs if the following conditions are satisfied:

  1. it is incurred in the period beginning 1 April 2010 and ending 31 March 2025 (corporation tax) or the period beginning 6 April

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