Tax & Accounting News

Changes to Capital Allowances

01/07/2010

As was widely predicted, Capital Allowances (CAs) took a hit in the recent Emergency Budget, to help finance the overall decrease in the Corporation Tax rate.

However, the changes were not as extensive as some predicted, with the Annual Investment Allowance remaining in place, albeit at a reduced level of £25,000, while writing-down rates were reduced to 18 per cent for the General Pool and eight per cent for the special rate pool.

The reduction in writing-down rates also makes the 100 per cent Enhanced Capital Allowances on low-carbon or energy-saving equipment even more attractive, meaning that a company looking to make improvements to its premises should always look to maximise the environmental advantages.

As well as reducing the cost of capital improvements for companies, CAs can also prove useful when obtaining finance from banks, as the tax savings mean more money available for the company elsewhere, while the approvals process for CAs can be viewed in a favourable light by bank lending committees.

For more information on claiming CAs, please contact us.

 

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