Part 2Plant and machinery allowances
Chapter 5Allowances and charges
First-year allowances
52First-year allowances
1
A person is entitled to a first-year allowance in respect of first-year qualifying expenditure if—
a
the expenditure is incurred in a chargeable period to which this Act applies, and
b
the person owns the plant or machinery at some time during that chargeable period.
2
Any first-year allowance is made for the chargeable period in which the first-year qualifying expenditure is incurred.
3
The amount of the allowance is a percentage of the first-year qualifying expenditure in respect of which the allowance is made, as shown in the Table—
Type of first-year qualifying expenditure | Amount |
|---|---|
Expenditure qualifying under section 40 (expenditure incurred for Northern Ireland purposes by small or medium-sized enterprises) | 100% |
Expenditure qualifying under section 44 (expenditure incurred by small or medium-sized enterprises) | 40% |
Expenditure qualifying under section 45 (ICT expenditure incurred by small enterprises) | 100% |
4
A person who is entitled to a first-year allowance may claim the allowance in respect of the whole or a part of the first-year qualifying expenditure.
5
Subsection (1) needs to be read with section 236 (first-year allowances in respect of additional VAT liabilities) and is subject to—
section 205 (reduction of first-year allowance if plant or machinery provided partly for purposes other than those of qualifying activity),
section 210 (reduction of first-year allowance if it appears that a partial depreciation subsidy is or will be payable), and
sections 217, 223 and 241 (anti-avoidance: no first-year allowance in certain cases).