The Capital Allowances (Designated Assisted Areas) Order 2016

EXPLANATORY NOTE

(This note is not part of the Order)

This Order designates areas as designated assisted areas for the purposes of section 45K of the Capital Allowances Act 2001 (c. 2) (“CAA 2001”).

Section 45K CAA 2001 provides for 100 per cent first-year capital allowances (FYAs) for companies investing in plant or machinery for use primarily in designated assisted areas within Enterprise Zones. To qualify for this relief, the expenditure must be incurred at a time when an area is designated.

Article 2 designates areas for the purposes of section 45K of CAA 2001. The designated areas are those identified on maps included in memoranda of understanding entered into for the purposes of section 45K of CAA 2001. Article 2(3) sets out that the memoranda of understanding are deposited and available for inspection by members of the public at the address shown in that provision.

Section 45K(4) provides that, where appropriate, the order may have retrospective effect. Article 1 provides that an area designated by this Order is to be treated as having been so designated at times falling on or after 18th March 2015 if the area is listed in Schedule 1 and on or after 16th March 2016 if the area is listed in Schedule 2, so that this Order will ensure that the relevant FYAs provisions may have effect in relation to expenditure incurred on or after 18th March 2015 for areas listed in Schedule 1 and on or after 16th March 2016 for areas listed in Schedule 2.

A Tax Information and Impact Note covering this instrument was published on 16th March 2016 alongside Budget 2016 and is available on the HMRC website at https://www.gov.uk/government/publications/extension-of-enhanced-capital-allowances-for-enterprise-zones/extension-of-enhanced-capital-allowances-for-enterprise-zones. It remains an accurate summary of the impacts that apply to this instrument.