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Main Capital Allowances |
| Motor Cars |
| On reducing balance (max. £3,000 p.a. per car) |
25% |
| Plant and machinery |
| Small and medium firms: |
| Allowance for the first year |
40% |
| Writing down allowance on reducing balance |
25% |
| Large firms: |
| Writing down allowance only on reducing balance |
25% |
| Long Life Assets |
| Allowance for first year |
6% |
| Writing down allowance for subsequent years on reducing balance |
6% |
| IT Expenditure |
| For small firms (Note 2) |
100% |
| Energy Saving Technology |
| All firms |
100% |
| Low Emission Cars |
| Registered on or after 17 April 2002 |
100% |
| Buildings |
| Industrial buildings and qualifying hotels |
4% of cost p.a. |
| Commercial/Industrial buildings in an enterprise zone |
100% |
| Agricultural buildings |
4% of cost p.a. |
| Scientific Research |
100% |
| Know how on reducing balance |
25% |
| Patent rights on reducing balance |
25% |
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Notes
1. Capital allowances allow the cost of capital assets to be written off against taxable profits. They replace the charge for depreciation in the business accounts, which is not allowable for tax relief.
2. A small firm is defined as a business that satisfies any two of the following conditions: (a) turnover £2,800,000 or less (b) assets £1,400,000 or less (c) not more than 50 employees.
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