Studying this technical article and answering the related questions can count towards your verifiable CPD if you are following the unit route to CPD and the content is relevant to your learning and development needs. One hour of learning equates to one unit of CPD. We'd suggest that you use this as a guide when allocating yourself CPD units.
This article was first published in the November 2011 edition of Accounting and Business magazine.
In the world of capital allowances it is all too evident that there has been a change of government.
The previous government used capital allowances to promote spending. The current government prefers a more direct approach, with a reduced corporation tax rate, hence the change of direction. The reduction in capital allowances has helped reduce the rate of corporation tax.
The ultimate losers are unincorporated entities not subject to corporation tax. Could this be a reason to incorporate?
So what has changed, what has gone and what has come in?
Industrial buildings allowance (IBA) and agricultural buildings allowance (ABA), both of 4%, which were available prior to the changes in April 2008, have been phased out. Both allowances will be unavailable after 31 March 2011 for companies and 5 April 2011 for unincorporated businesses.
Enhanced capital allowance
This 100% allowance is available for environmentally beneficial plant and machinery. Examples include water efficiency systems, energy-saving heating and low-emission cars (see following page for details).