Corporate Capital Allowances – Full Expensing

From 1 April 2023 until 31 March 2026, companies liable for corporation tax will be able to benefit from “Full Expensing”. This means that they can claim a 100% first-year allowance (FYA) for capital expenditure on qualifying plant and machinery.

The 100% FYA will be available for expenditure on new and unused plant and machinery that ordinarily qualifies for the 18% main rate of writing down allowances. A temporary FYA of 50% will also be available for expenditure on new and unused special rate plant and machinery, including integral features in a building, and long-life assets that normally qualify for 6% writing down allowances.

The measures announced will only apply to qualifying expenditure on “new” and not “second hand” or “used” plant and machinery. However, the general exclusions for FYAs will still apply, and therefore expenditure on cars or plant or machinery acquired for leasing will be excluded.