Part 2

Plant and machinery allowances
Chapter 4

First-year qualifying expenditure

Types of expenditure which may qualify for first-year allowances

General exclusions applying to sections 40, 44 and 45
46
1
Expenditure within any of the general exclusions in subsection (2) is not first-year qualifying expenditure under—
- section 40 (expenditure incurred for Northern Ireland purposes by small or medium-sized enterprises),
- section 44 (expenditure incurred by small or medium-sized enterprises), or
- section 45 (ICT expenditure incurred by small enterprises).
2
The general exclusions are—
- General exclusion 1 The expenditure is incurred in the chargeable period in which the qualifying activity is permanently discontinued.
- General exclusion 2 The expenditure is incurred on the provision of a car (as defined by section 81).
- General exclusion 3 The expenditure is of the kind described in section 94 (ships).
- General exclusion 4 The expenditure is of the kind described in section 95 (railway assets).
- General exclusion 5 The expenditure would be long-life asset expenditure but for paragraph 20 of Schedule 3 (transitional provisions).
- General exclusion 6 The expenditure is on the provision of plant or machinery for leasing (whether in the course of a trade or otherwise). For this purpose, the letting of a ship on charter, or of any other asset on hire, is to be regarded as leasing (whether or not it would otherwise be so regarded).
- General exclusion 7
The circumstances of the incurring of the expenditure are that—
  1. the provision of the plant or machinery on which the expenditure is incurred is connected with a change in the nature or conduct of a trade or business carried on by a person other than the person incurring the expenditure, and
  2. the obtaining of a first-year allowance is the main benefit, or one of the main benefits, which could reasonably be expected to arise from the making of the change.
- General exclusion 8
Either of the following sections applies—
  - section 13 (use for qualifying activity of plant or machinery provided for other purposes);
  - section 14 (use for qualifying activity of plant or machinery which is a gift).
This is subject to section 161 (pre-trading expenditure on mineral exploration and access).