CA23165 - Plant and Machinery Allowance (PMA): First Year Allowance (FYA): Super-Deduction and Special Rate (SR) Allowance: General exclusions from FYAs

FA21/S9(9)

All of the CAA01/S46(2) general exclusions from first year allowances apply to the super-deduction and SR allowance. There is guidance on the general exclusions at CA23113. The following additional guidance may be particularly relevant when considering claims to the super-deduction and SR allowance.

General exclusion 2 – expenditure on the provision of a car

Expenditure incurred on the provision of a car is not eligible for the super-deduction or SR allowance. CAA01/S268A defines a car for the purposes of capital allowances and there is guidance at CA23510.

General exclusion 5 – long-life asset expenditure

The effect of General Exclusion 5 is sometimes misunderstood. It does not prevent long-life asset expenditure from qualifying for first year allowances. It only excludes expenditure that would be long-life asset expenditure but for transitional provisions in paragraph 20 of Schedule 3. In practice, you may find it helpful to disregard General Exclusion 5 as it will only apply to expenditure that is already excluded from the super-deduction and SR allowance under other conditions (either because the expenditure was incurred before 1 April 2021 or because the plant/machinery is second hand). Long-life asset expenditure is within the scope of the SR allowance as long as the standard conditions are met.

General exclusion 6 – plant or machinery for leasing

Expenditure on the provision of plant or machinery for leasing is excluded from the scope of the super-deduction and SR allowance. CA23113 provides further guidance on general exclusion 6. There is a distinction between the leasing or hiring of an asset and the provision of services that involve the use of an asset (CA23115).

Background plant or machinery in building for leasing

FA21/S9(9) contains an exception to general exclusion 6 (expenditure on the provision of plant and machinery for leasing) where the lease is an “excluded lease of background plant or machinery for a building” as defined by CAA01/S70R.