Effecting businesses investing in plant and machinery which qualifies for special rate writing-down allowances. This is likely to have application to businesses across a broad range of industries, as it covers integral features and long-life assets, amongst other assets.
Expenditure on some types of plant or machinery must, if neither Annual Investment Allowance (AIA) or First Year Allowances (FYA's) are available, be allocated to a ‘special rate pool’.
Expenditure to be allocated to the special rate pool for commercial buildings consists of expenditure incurred on:
The annual writing-down allowances available on the special rate pool is 6% from 1 April 2019 (corporation tax) and 6 April 2019 (income tax). Prior to these dates, the special rate was 8%.
Expenditure that would otherwise fall into the special rate pool is eligible for the AIA, except for cars and certain other exclusions. See the Annual Investment allowance (AIA) page.
These are items with a useful life of at least 25 years from when they were new.
They are put into special rate pool if the value of all the long-life items brought in a single accounting period (the tax year if you’re a sole trader or partner) adds up to £100,000. If however, their total value is less than £100,000, they will be put into the main rate pool.
The £100,000 limit is adjusted if your accounting period is more or less than 12 months.
If your accounting period is 9 months the limit will be 9/12 x £100,000 = £75,000.
Integral features are: