A package of changes including the introduction of new allowances and revision of the rates of existing allowances
The current 50% First Year Allowances for small and medium-sized businesses are extended for a further 12 months.
From 2008-09:
- First Year Allowances will be replaced with a new Annual Investment Allowance for the first £50,000 of plant and machinery expenditure in the general pool. The scope and operation of this relief will be the subject of consultation starting this summer so until the consultation period has expired we will not know exactly how the AIA will operate
- The Writing Down Allowance (WDA) for plant and machinery in the general pool will decrease from 25% to 20%
- The WDA on long-life assets will increase from 6% to 10%
- The Industrial Buildings Allowance (IBA) and Agricultural Buildings Allowance (ABA) will start to be phased-out leading to a full withdrawal in 2010-11
- The WDA available on fixtures integral to a building will be set at 10% and there will be a detailed consultation on how this will operate this summer so we will not know exactly what will qualify for this allowance until the consultation is complete.
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