SE36860 - Deductions from emoluments: capital allowances: procedures: time limits for notifying expenditure (1996/97 and earlier only)
Section 118(3) and (4) FA 1994
For 1996/97 and earlier years, capital allowances for expenditure on machinery and plant could be claimed only if the expenditure was notified to the Revenue within the time limits laid down in Section 118 FA 1994. The time limits which applied in Schedule E cases are shown in the table below:
| Year of assessment | Time limit for notifying expenditure |
| 1992/93 and earlier | Three years from the
end of the year of assessment
(For example, the time limit for 1992/93 runs out on 5 April 1996) |
| 1993/94 to 1995/96 | Two years from the end
of the year of assessment
(For example, the time limit for 1994/95 runs out on 5 April 1997) |
| 1996/97 | Twelve months from 31
January following the end of the year of assessment
(So, the time limit for 1996/97 runs out on 31 January 1999) |
The notification does not have to be in a specific form. It can be made in correspondence, by the completion of a form P87, or by the completion of a self- assessment.
First year allowances (see SE36610)
First year allowances cannot be given for a year of assessment
if the expenditure was not notified to the Revenue within the
relevant time limit, as shown in the table above. However,
expenditure which is notified late will qualify for writing down
allowances (
not first year allowances) in a later year.
For example, an employee buys an item qualifying for first
year allowance on 5 June 1994. This is in 1994/95, and the time
limit for notifying expenditure for capital allowance purposes for
that year is 5 April 1997. The employee does not notify the Revenue
until 5 May 1997. This is outside the time limit for 1994/95, so no
first year allowance (or writing down allowance) can be given for
that year. However the expenditure has been notified within the
time limit for 1995/96, so writing down allowances can be given for
1995/96 onwards as long as the item continues to belong to the
employee.
Note that, in this example, the writing down allowance for
1995/96 is based on the original cost of the item in question. The
cost is not reduced by the first year allowance that the employee
might have claimed in 1994/95 if the expenditure had been notified
within the time limit.
Writing down allowances (see SE36650)
Writing down allowances cannot be given for 1996/97 or earlier
if the expenditure was not notified to the Revenue within the
relevant time limit, as shown in the table above. However,
expenditure which is notified late will qualify for writing down
allowances in a later year (as in the example above). Here again,
the allowances due in the later year will be based on the original
cost.
Note that an item of expenditure only has to be notified
once. Once an item has been notified, writing down allowances can
continue for as long as the employee is entitled to claim.
