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Capital allowances The rates of writing down allowances (WDA) will be reduced for chargeable periods ending on or after 1 April 2012 (companies) or 6 April 2012 (unincorporated trades). The "general pool" will be written down at 18% rather than 20%, and the "special rate pool" (typically longer-life assets and cars with carbon dioxide emissions rating above 160g/km) at 8% rather than 10%. At the same time, the Annual Investment Allowance (AIA) – the amount of expenditure on plant and machinery that qualifies for a 100% immediate deduction – will be reduced from £100,000 to £25,000. It rose from £50,000 to £100,000 in April 2010. There are complex rules for computing both the WDA and the AIA for chargeable periods which straddle a change in rate, and these will need to be consulted in 2012 for traders whose year ends do not match the tax year.
Zero-emission goods vehicles The last Labour Budget introduced nil taxable benefits for company cars which do not emit carbon dioxide, for five years starting in 2010/11. The new Budget brings in 100% first year allowances for the purchase of goods vehicles with zero emissions. It applies for purchases for five years from 1 April 2010 (companies) or 6 April 2010 (unincorporated). The vehicle must be new and unused, not second-hand. | ||||