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Main change sees an increase of 1% for structures and buildings allowance.

Structures and buildings allowance

As previously announced the annual rate of capital allowances available for qualifying investments on or after 29 October 2018 to construct new, or renovate old, non-residential structures and buildings will increase from 2% to 3%.

The change will take effect from 1 April 2020 for corporation tax and 6 April 2020 for income tax. Businesses whose chargeable period spans 1 April (corporation tax) or 6 April (income tax), may claim 2% per year for days in that period before the operative date and 3% for days thereafter.

Capital allowances for business vehicles

The government previously announced that it is consulting on bringing forward to 2035 the ending of sales of new petrol, diesel and hybrid cars and vans.

To encourage businesses to purchase more environmentally friendly (lower CO2 emission) vehicles, the availability of First Year Allowances (FYAs) has been extended to April 2025 (this was due to come to an end from April 2021).

100% FYAs will continue to apply for business cars acquired from April 2021 with CO2 emissions of 0g/km (pure electric vehicles).

Business cars with CO2 emissions up to 50g/km will be eligible for WDAs at the main rate of 18% while cars with CO2 emissions over 50g/km will be eligible for WDAs at the special rate of 6%.

The new 50g/km threshold will also apply for determining the lease rental restriction of 15% of the costs of hiring business cars.

Article from ACCA In Practice