Plant and machinery 'First-Year Allowances (FYA)' enable you to make a claim for up to 100 per cent of the cost of certain qualifying items against your business profits in the year of purchase.
FYA of 100 per cent are currently available for expenditure on:
All of the above allowances are available if you pay Income Tax as self-employed, a partnership or sole trader, or if you pay Corporation Tax as a company or organisation.
From April 2010 certain zero emission goods vehicles qualify for FYA.
This guide provides a summary of the above qualifying FYA with links to more detailed information on each.
On this page:
This guide provides an overview of the different types of FYA that your business may be able to claim. However please note that FYA are not generally available on the cost of plant and machinery that a business buys to lease out. There are also restrictions when buying plant and machinery for use within a property that you lease out. To find out more see the section below on FYA: non-qualifying items.
FYA are available for expenditure on plant and machinery that is designed to improve water quality and/or reduce water use , for example, water efficient showers and taps, and vehicle-wash water reclaim units - and is included as a qualifying technology or product specified in a Technology List or a Product List issued by the Secretary of State for the Department for Environment, Food and Rural Affairs.
As described above, you can't usually claim this allowance for equipment that you buy for leasing out. Follow the link below for more information about what equipment qualifies and how to claim.
FYA for water efficient technologies
If your business or organisation is liable to Corporation Tax, there are also some special rules that may allow you to surrender losses you make that are attributable to investments in qualifying equipment in return for a cash payment called a first-year tax credit. It is the making of the claim that creates the loss and it is only the loss attributable to the capital allowance claim for these assets that is relevant for the first-year tax credits.
FYA for water efficient technologies
Find out more about first-year tax credits
FYA are also available for expenditure on energy-saving equipment, such as high-efficiency lighting units and solar thermal systems, that is included as a qualifying technology or product specified in a Technology List or a Product List issued by the Secretary of State for the Department of Energy and Climate Change.
As described above, you can't usually claim this allowance for equipment that you buy for leasing out. Follow the link below to find out more information about what equipment qualifies and how to claim.
FYA for energy saving products
If your business or organisation is liable to Corporation Tax, there are also some special rules that may allow you to surrender losses you make that are attributable to investments in qualifying equipment in return for a cash payment called a first-year tax credit. It is the making of the claim that creates the loss and it is only the loss attributable to the capital allowance claim for these assets that is relevant for the first-year tax credits.
FYA for energy saving products
Find out more about first-year tax credits
FYA are available (up to 31 March 2015) for expenditure on a new electric car, or a new, unused car with CO2 emissions up to the threshold. For expenditure incurred before 1/6 April 2013 the threshold is not more than 110gm per km driven. From 1/6 April 2013 (subject to legislation) the threshold will be reduced to not more than 95g per km driven Follow the link below for more information on capital allowances on cars.
Capital allowances on plant and machinery
FYA are available from 1 April 2010 (and up to 31 March 2015) for expenditure on a new and unused goods vehicle with zero emissions. However, there are certain restrictions. If you are intending to acquire a zero emission goods vehicle, please contact the HM Revenue & Customs (HMRC) Capital Allowances Helpline on Tel 020 7147 2610 - this is an answerphone with a call-back service.
Until 31 March 2015 (subject to legislation) 100 per cent FYA are available for expenditure on new plant and machinery installed to refuel vehicles with:
Eligible equipment can include:
The refuelling station does not need to be open to the public or used for cars. For example, an operator of a fleet of commercial vehicles may install a gas refuelling station on its premises to refuel its vehicles.
As described above, you can't usually claim this allowance for equipment that you buy for leasing out.
Find out more about expenditure on natural gas and hydrogen refuelling equipment
FYA are not generally available on the cost of plant and machinery that a business buys to lease out, except in the following circumstances:
Note that FYA are not available on the cost of plant and machinery for use within a property used as a dwelling that you lease out in the UK or overseas. However, items bought for use within common parts may qualify.
Find out more about assets used for leasing and those used in the course of providing a service
Find a list of expenditure that doesn't qualify for first-year allowances
If you need help in making your capital allowances claim you can contact the HMRC Self Assessment Helpline.
