|First year allowance 1||Main pool||Special rate pool|
|2021 to 2025||0||100%||1 to 50||18%||Above 50||6%|
|2019 to 2021||50 or below||100%||51 to 110||18%||Above 110||6%|
|2018 to 2019||50 or below||100%||51 to 110||18%||Above 110||8%|
|2015 to 2018||75 or below||100%||76 to 130||18%||Above 130||8%|
|2013 to 2015||95 or below||100%||96 to 130||18%||Above 130||8%|
|2012 to 2013||110 or below||100%||111 to 160||18%||Above 160||8%|
|2009 to 2012||110 or below||100%||111 to 160||20%||Above 160||10%|
Capital allowances available via the main or special rate pools are calculated on a reducing balance basis, but there is no longer any balancing allowance or charge on disposal, unless a car has been allocated to a single asset pool for a sole trader or partner because it is used partly for private purposes. Hence there will no longer be 100% recovery of tax relief on commercial depreciation over the life of a car on the fleet.
Until April 2025, a business that purchases a van with zero CO₂ emissions is eligible for a 100% first year allowance. Otherwise, vans should be treated as plant and machinery and allocated to the main pool, where they will be eligible for writing down allowances at 18%, unless an Annual Investment Allowance, Super-deduction, or Enhanced Capital Allowance is claimed.
Following an extension announced in the Autumn Statement 2022, until April 2025, any business that pays for the installation of an electric charge point at its workplaces is eligible for a 100% first year allowance, but any company that incurs expenditure on the installation of an electric charge point between 1 April 2021 and 31 March 2023 may claim a Super-deduction.
Most businesses may claim the annual investment allowance on expenditure on plant and machinery up to the maximum allowance of £1 million.
It was intended that the maximum allowance would be reduced to £200,000 from April 2023, but, per the Growth Plan 2022 and Autumn Statement 2022 announcements, it has been permanently set at £1 million.
Businesses may claim the allowance on both general and special rate plant and machinery. It is effectively a 100% allowance that applies to most qualifying expenditure up to the annual cap, with expenditure on cars being the most important exception. Commercial vehicles, such as vans, should qualify for the annual investment allowance.
Where qualifying expenditure exceeds the annual cap tax relief will be given under the normal capital allowance regime via the main or special rate pools, with writing down allowances being given at 18% or 6% respectively, on the reducing balance basis.
A super-deduction is available between 1 April 2021 and 31 March 2023 for companies investing in qualifying new plant and machinery. A 130% first year allowance will be available for main pool expenditure, such as vans and electric charge points, and a 50% first year allowance will be available for qualifying special rate expenditure.
When a qualifying main pool asset is subsequently sold, tax will be due on 130% of the sale price in the year of disposal. This clawback does not though apply to special rate expenditure.
A super-deduction will only be available on assets that are unused and not second hand, and they will not be available on the purchase of cars or to companies buying assets to lease.
An enhanced capital allowance of 100% is available for companies investing in plant and machinery for use in Freeports in Great Britain, once designated. This will apply to both main and special rate assets, allowing firms to reduce their taxable profits by the full cost of the qualifying investment in the year it is made, and will remain available until 30 September 2026.