Capital allowances and full expensing

Spring announcement on full expensing made permanent in Autumn Statement

During its Spring Budget 2023, the government introduced two new temporary first-year allowances. For qualifying expenditure on the provision of plant or machinery incurred on or after 1 April 2023 but before 1 April 2026, companies can claim:

  • a 100% first-year allowance for main rate expenditure – known as full expensing
  • a 50% first-year allowance for special rate expenditure.

The government also committed to making full expensing permanent when fiscal conditions allowed.

This measure makes full expensing and the 50% first-year allowance permanent for companies investing in plant and machinery.

The government will launch a technical consultation on wider changes to further simplify the Capital Allowances Act 2001. It is also considering extending full expensing to asset leasing.

This measure will have effect from Royal Assent to Autumn Finance Bill 2023.