Part 2

Plant and machinery allowances
Chapter 5

Allowances and charges

First-year allowances

First-year allowances
52
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—
Table
Amount of first-year allowances
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%
Expenditure qualifying under section 45A (expenditure on energy-saving plant or machinery | 100%
Expenditure qualifying under section 45D (expenditure on cars with low CO 2 emissions) | 100%
Expenditure qualifying under section 45E (expenditure on plant or machinery for gas refuelling station) | 100%
Expenditure qualifying under section 45F (expenditure on plant and machinery for use wholly in a ring fence trade) which is long-life asset expenditure | 24%
Expenditure qualifying under section 45F (expenditure on plant and machinery for use wholly in a ring fence trade) other than long-life asset expenditure | 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).
S. 52(3): words in Table added (with effect as mentioned in s. 65 of the amending Act) by Finance Act 2001 (c. 9), s. 65, Sch. 17 para. 4
S. 52(3): words in Table added (with effect as mentioned in s. 59 of the amending Act) by Finance Act 2002 (c. 23), s. 59, Sch. 19 para. 5
S. 52(3): words in Table added (with effect as mentioned in s. 61 of the amending Act) by Finance Act 2002 (c. 23), s. 61, Sch. 20 para. 5
S. 52(3): words in Table added (with effect as mentioned in s. 63 of the amending Act) by Finance Act 2002 (c. 23), s. 63, Sch. 21 para. 6
Pt. 2 (ss. 11-270) modified (prosp.) by Proceeds of Crime Act 2002 (c. 29), ss. 448, 458(1), Sch. 10 para. 12 (with para. 17(1))