What is the 50% first-year allowance?
Companies can deduct 50% of qualifying new and unused special-rate equipment costs upfront. The remaining cost goes into the special-rate pool for writing down allowances from the following accounting period.
These answers provide general information, not advice tailored to your circumstances. Rules can change and exceptions may apply — speak to the CASS team before making a tax, accounting or financial decision.
Relief for special-rate equipment
The 50% first-year allowance is available to companies subject to Corporation Tax for eligible expenditure incurred from 1 April 2023. It applies to qualifying new and unused special-rate plant and machinery. This can include certain heating, electrical and other integral building systems. Half the qualifying cost is deducted upfront. The remaining half goes into the special-rate pool in the following accounting period and receives writing down allowances. Cars and most equipment bought to lease to other people are excluded. If AIA is available, the same expenditure may qualify for a full deduction instead. CASS can check which allowance gives the appropriate result for your investment.
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