Capital Allowances in the 2016 Budget, the Next generation budget

 Capital Allowances in the 2016 Budget, the Next generation budget

This is a summary of the Chancellors budget with respect to Capital Allowances. There are no major changes for every day businesses: -

1.      Confirmation that the government will also ensure that all zones are able to offer Enhanced Capital Allowances for eight years following the establishment of the ECA site

2.      The government will extend the 100% First Year Allowance (FYA) for businesses purchasing low emission cars for a further 3 years to April 2021 and reduce the main rate threshold for capital allowances for business cars to 110 g/km of CO2 and the FYA threshold to 50 g/km of CO2 from April 2018, to reflect falling vehicle emissions.

3.      Providing Enhanced Capital Allowances for the Enterprise Zone at Coleraine, Northern Ireland – The government will legislate to offer enhanced capital allowances within the Northern Ireland Executive’s pilot Enterprise Zone at Coleraine.

4.      Providing Enhanced Capital Allowances for a proposed Enterprise Zone at Port Talbot, Wales – The government will support proposals for an Enterprise Zone at Port Talbot by offering enhanced capital allowances to investors within that Zone, subject to agreement with the Welsh Government on the boundaries within which ECAs will be available.

5.      Capital allowances and leasing – As announced at the Spending Review and Autumn Statement 2015, the government will amend legislation to counter two types of avoidance involving capital allowances and leasing, with effect from 25 November 2015. These changes will prevent companies from artificially lowering the disposal value of plant and machinery for Budget 2016 107 capital allowances purposes, and make any payment received for agreeing to take responsibility for tax deductible lease related payments subject to tax as income. (Finance Bill 2016)

6.      Enhanced Capital Allowances (ECAs): energy-saving and water-efficient technologies – The list of designated energy-saving and water-efficient technologies qualifying for an ECA will be updated during summer 2016, subject to State aid approval. (38)

Call us at EXACT for more information.

Published: 16th March 2016

Previous Page