This is a freeview 'At a glance' guide to capital allowances: rates and allowances. 

Capital allowances should be considered in business planning when an existing business has plant and machinery or other assets.

Capital allowances main rates

(see the left-hand menu for detailed guidance on Capital allowances)

Expenditure on plant and machinery, and structures and buildings.

Type	2021/22 to 2022/23	2020/21	2019/20	2017/18 to 2018/19	2015/16 to 2016/17
Super deduction *	130%/50%/100%	-	-	-	-
Annual Investment Allowance (AIA)  Limit:	100%  £1 million	100%  £1 million	100%  £1 million	100%  £200,000	100%  2015/16:£500,000 2016/17:£200,000
Writing-down allowance (WDA): general pool	18%	18%	18%	18%	18%
WDA: Integral features and Long life assets	6%	6%	6%	8%	8%
Small pool write off, written-down balance in either or both WDA pool(s) is £1,000 or less	100%	100%	100%	100%	100%
First Year Allowance (FYA): Electric car charging points	100%	100%	100%	100%	100% from 23 November 2016
Structures and Buildings Allowance (SBA)	3% straight line	3% straight line	2% straight line	From 29/10/18 2% straight line	-
Enterprise Zone Limit	100% €125 million	100% €125 million	100% €125 million	100% €125 million	100% €125 million
Enhanced Capital Allowances (ECA) (energy-saving and environmentally beneficial plant and machinery)	100% ECAs in Enterprise Zones until the later of 31 March 2021 and eight years from the date the area was designated or treated as designated	Withdrawn except in respect of Enterprise Zones	100%	100%	100%
Freeports (new designated sites): ECAs  SBAs Super Deduction** & AIA	100% 10% If within expenditure limits
Business Property Renovation				(withdrawn from April 2017)	100%

The £1m temporary increase in the AIA was due to end on 31 December 2021. This was extended to 31 March 2023 by Finance Act 2022. 

*The Super Deduction is available only to companies, at a rate of 130% for main rate assets, 50% for special rate assets (i.e. Fixtures and Integral Features), or 100% for assets used partly for ring-fenced trades and partly for qualifying trades (on apportionment). The Super Deduction is available for qualifying expenditure incurred between 1 April 2021 and 31 March 2023.

Motor cars 

Cars purchased from 1 April 2018/ 5 April 2018  (includes cars used by sole traders or partnerships with private use in a single asset pool)	2021-22  to 2024-25	2018-19 to 2020-21
Type	Rate	Rate
FYA for new electric cars or new zero-emission	100%	100%
FYA if CO2 emissions are 50g/km or lower (new cars only)	n/a	100%
WDA if CO2 emissions are 50g/km or lower (not zero)	18%	n/a
WDA if CO2 emissions are between 50g/km and 110g/km	6%	18%
WDA (second-hand vehicles) if CO2 emissions are less than 110g/km	6%	18%
WDA if CO2 emissions exceed 110g/km	6%	6%

Motor cars 

Purchased between April 2015 and April 2018	2015/16 to 2017-18
Type	Rate
FYA for electric cars or if CO2 emissions are 75g/km or lower	100%
WDA (second-hand vehicles) if CO2 emissions do not exceed 130g/km	18%
WDA if CO2 emissions exceed 75g/km but do not exceed 130g/km	18%
WDA if CO2 emissions exceed 130g/km	8%

 

See Vehicles (4 wheels): Allowances

Finance Act 2021

• A new Super-deduction allowance for plant & machinery on new qualifying expenditure by companies, incurred between 1 April 2021 and 31 March 2023, will receive an enhanced 130% first year allowance.
• A 50% First Year Allowance is also introduced. 
  • See Super-deduction & First Year Allowances
• A short-term measure to prevent leases, where extended due to COVID-19, from inadvertently becoming long funding leases and falling foul of the anti-avoidances measures included in the Capital Allowances Act 2001. 
  • See: Plant & Machinery: Allowances
• A 100% Enhanced Capital Allowance for Freeports is to be introduced, as well as a 10% Structures and Buildings Allowance. These coincide with the announcement of the eight new Freeport sites across England, one in Wales and two in Scotland (and potentially further sites across the rest of the UK).
  • See Freeports: tax breaks.

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