Part 2 Plant and machinery allowances
Chapter 5 Allowances and charges
First-year allowances
52 First-year allowances
(1)
A person is entitled to a first-year allowance in respect of first-year qualifying expenditure if—
(a)
the expenditure is incurred in a chargeable period to which this Act applies, and
(b)
the person owns the plant or machinery at some time during that chargeable period.
(2)
Any first-year allowance is made for the chargeable period in which the first-year qualifying expenditure is incurred.
(3)
The amount of the allowance is a percentage of the first-year qualifying expenditure in respect of which the allowance is made, as shown in the Table—
Amount of first-year allowances
Type of first-year qualifying expenditure | Amount |
|---|---|
Expenditure qualifying under section 40 (expenditure incurred for Northern Ireland purposes by small or medium-sized enterprises) | 100% |
Expenditure qualifying under section 44 (expenditure incurred by small or medium-sized enterprises) | 40% |
Expenditure qualifying under section 45 (ICT expenditure incurred by small enterprises) | 100% |
F1Expenditure qualifying under section 45A (expenditure on energy-saving plant or machinery | 100%F1 |
F2Expenditure qualifying under section 45D (expenditure on cars with low CO2 emissions) | 100%F2 |
F3Expenditure qualifying under section 45E (expenditure on plant or machinery for gas refuelling station) | 100%F3 |
F4Expenditure qualifying under section 45F (expenditure on plant and machinery for use wholly in a ring fence trade) which is long-life asset expenditure | 24% |
Expenditure qualifying under section 45F (expenditure on plant and machinery for use wholly in a ring fence trade) other than long-life asset expenditure | 100%F4 |
(4)
A person who is entitled to a first-year allowance may claim the allowance in respect of the whole or a part of the first-year qualifying expenditure.
(5)
Subsection (1) needs to be read with section 236 (first-year allowances in respect of additional VAT liabilities) and is subject to—
section 205 (reduction of first-year allowance if plant or machinery provided partly for purposes other than those of qualifying activity),
section 210 (reduction of first-year allowance if it appears that a partial depreciation subsidy is or will be payable), and
sections 217, 223 and 241 (anti-avoidance: no first-year allowance in certain cases).