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Capital Allowances Act 2001

Section 80: Vehicles provided for purposes of employment or office

379.This section is based on section 27(2A) to (2E) of CAA 1990. It gives plant and machinery allowances to employees and office-holders on a car or cycle they use partly for “business travel”. There is a minor change.

380.The general rule in section 36 is that employees and office-holders have qualifying expenditure only for plant or machinery “necessarily provided for use in the performance of the duties”. This rule is relaxed to include expenditure on cars and cycles partly for use as in subsection (2) – what is generally known as “business use”. This includes a minor change to align the legislation for capital allowances with that for expenses in ICTA. See Change 18 in Annex 1.

381.Subsection (3) limits the balancing allowance an employee or office-holder is entitled to if they have:

  • in some years claimed capital allowances on a car or cycle; and

  • in other years made use instead of the administrative arrangements (for example the fixed profit car scheme) which give tax relief without claims.

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