HM Treasury’s United Kingdom Budget 2007

Grant Thornton

Grant Thornton

Capital Allowances and Reliefs (%)

Plant and machinery with expected life less than 25 years

  • Writing down allowance 1
    • restricted to £3,000 per annum for cars costing over £12,000, other than those with low emissions
25
  • First year allowances
    • Small enterprises 2
    • qualifying expenditure between 1 April 2006 and 31 March 2007 for enterprises subject to corporation tax
50
    • qualifying expenditure between 6 April 2006 and 5 April 2007 for other enterprises
50
  • Small and medium sized enterprises 3
40
  • All enterprises 3
    • designated energy saving plant and machinery
100
    • expenditure pre 1 April 2008 on new electric cars and low carbon dioxide emission cars
100
    • expenditure pre 1 April 2008 on refuelling equipment for vehicles using natural gas or hydrogen fuel
100
    • environmentally beneficial plant and machinery
100
    • plant used in oil extraction trade
100

Plant and machinery with expected life 25 years or more
  • Writing down allowance1
    • expenditure not over £100,000 per annum
25
    • expenditure on assets in dwellings, shops, showrooms, hotels and offices
25
    • expenditure over £100,000 per annum
6
  • First year allowance
– plant used in oil extraction trade 24
Plant and machinery for overseas leasing
  • Writing down allowance1
10
Industrial and agricultural buildings, hotels, sports pavilions, dredging and highway concessions
  • Writing down allowance
    • to be phased out over four years
    • no balancing adjustments in respect of balancing events occurring post 20 Mrch 2007
4

Enterprise zone buildings
  • Initial allowance
100
  • Writing down allowance
25

Flat conversion allowance (%)
  • Initial allowance
up to 100
  • Writing down allowance1
    – on renovation or conversion of space above commercial premises to provide flats to rent
25

Research and development
100
Patent rights and know how
  • writing down allowance1
    -not applicable to acquisitions by companies
25
Mineral extraction allowances
  • First year allowance oil extraction trade
100
  • Writing down allowance mineral asset acquisition1
10
  • Writing down allowance other qualifying expenditure1
25
Business premises renovation allowances
  • Initial allowance
100
  • Writing down allowance1
25
  • Expenditure post 10 April 2007

Enhanced Company tax Reliefs
Research and development
  • Small and medium sized enterprises (SME)
150
  • Large companies
125
  • Loss making SMEs can surrender deduction for a payment of 16% of the amount surrendered (subject to conditions)


Remediation of contaminated land

  • Loss making companies can surrender deduction for a payment of 16% of the amount surrendered (subject to conditions)
150%

Intangible assets (including intellectual property and goodwill)

  • relief for companies for expenditure on creation, acquisition and enhancement of intangible assets
  • based on accounts amortisation or
  • by election at a fixed rate of 4% per annum

1 On reducing balance
2 Restrictions apply

The figures shown here are subject to ammendment as the Finance Bill passes through Parliament.

This information has been prepared only as a topical guide to tax and personal financial matters. No responsibility can be accepted by us for loss occasioned to any person acting or refraining from acting as a result of any material contained in this publication.

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