Budget 2008

Capital Allowances and Reliefs - Budget 2008 - GT

Capital Allowances and Reliefs

  2008/2009 2007/2008
  % %

Plant and machinery

Annual investment allowance

– on first £50,000 of qualifying expenditure (excluding cars) 100
Writing down allowance* 20 25
– restricted to £3,000 per annumfor cars costing over £12,000, other than those with low emissions
Features integral to a building and thermal insulation
– Writing own allowance 10
First year allowances
Small enterprises
– qualifying expenditure between 1 April 2006 and 31 March 2008 for enterprises subject to corporation tax 50
qualifying expenditure between 6 April 2006 and 5 April 2008 for other enterprises 50
Medium sized enterprises† 40
All enterprises†
– designate energy saving plant an machinery‡

100 100
– expenditure on new low carbon dioxide emission cars 100 100
– expen iture on refuelling equipment for vehicles using natural gas, biogas or hy rogen fuel 100 100
– environmentally beneficial plant and machinery‡ 100 100
– plant use in oil extraction trade 100 100

Plant and machinery with expected life 5 years or more

Writing down allowance* 10 6
– expenditure not over £100,000 per annum 0 25
– expenditure on assets in wellings, shops, showrooms, hotels and offices 0 25
– expenditure over £100,000 per annum 10 6
First year allowances
– plant use in oil extraction trade 4 24

Plant and machinery for overseas leasing

– writing down allowance* 10 10

Industrial and agricultural buildings, hotels, sports pavilions,dredging and highway concessions

Writing down allowance 4
– being reduced by 1% per annum
– no balancing adjustments in respect of balancing events occurring post 20 March 2007
   

Enterprise zone buildings

– Initial allowance 100 100
– Writing down allowance 5 25

Flat conversion allowance

– Initial allowance 100 100
Writing down allowance* 5 25
– on renovation or conversion of space above commercial premises to provide flats to rent    
Research and development 100 100

Patent rights and know how

Writing down allowance* 5 25
– not applicable to acquisitions by companies    

Mineral extraction allowances

– First year allowance oil extraction trade

100 100
– Writing own allowance mineral asset acquisition* 10 10
– Writing own allowance other qualifying expenditure* 5 25

Business premises renovation allowances

– Initial allowance 100 100
– Writing own allowance* 5 25
– Expenditure post 10 April 2007    

Enhanced company tax reliefs

Research and development    
– Small and mediumsized enterprises (S E)¶

175 150
– Large companies 130 125
– Additional credits available for certain vaccines research expenditure    
– Loss making S Es can surren er e uction for a payment of 13.71% (16% 2007/2008) of the amount surren ere (subject to con itions)    

Remediation of contaminated land

150 150
– Loss making companies can surrender deduction for a payment of 16% of the amount surrenderd (subject to conditions) Intangible assets (including intellectual property and goodwill)    
– Relief for companies for expen iture on creation, acquisition and enhancement of intangible assets    
– Based on accounts amortisation or by election at a fixed rate of 4% per annum    

* On reducing balance.
† Restrictions apply.
‡ For 2008/2009 loss making companiescan surren er e uction for a payment of 19% of the amount surren ere . Refun greater of £250,000 or total PAYE+NI liability.
§ Or 75% of amount previously claime if ifferent.
¶ For 2008/2009 subject to European Commissionapproval an a cap on relief of
€ 7.5 million per project.

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