Plant and machinery - Annual Investment Allowance (AIA)
The AIA gives a 100% write-off on most types of plant and machinery costs, including integral features and long life assets but not cars, of up to £500,000 p.a. for expenditure incurred on or after 6 April 2014 (1 April 2014 for companies)). The £500,000 limit will reduce to £200,000 from 1 January 2016 and continue at this level until changed by subsequent legislation. Special rules apply to accounting periods straddling these dates.
Any plant and equipment acquisition costs in excess of these AIA limits will fall into the normal capital allowance pools: details set out below. The AIA may need to be shared between certain businesses under common ownership.
Other plant and machinery allowances
The annual rate of allowance is 18%. An 8% rate applies to expenditure incurred on integral features and on long life assets.
A 100% first year allowance may be available on certain energy efficient plant.
For expenditure incurred on cars, costs are generally allocated to one of the two plant and machinery pools. For expenditure incurred on or after 6 April 2013 (1 April 2013 for companies) cars with CO2 emissions not exceeding 130gm/km receive an 18% allowance p.a. Cars with CO2 emissions over 130gm/km receive an 8% allowance p.a.