CA23117 | Plant and Machinery Allowance (PMA): First Year Allowance (FYA): Unused and not second-hand

Meaning of 'unused and not second-hand'

Most FYAs are only available for expenditure on the provision of plant or machinery which is ‘unused and not second-hand'.

The fact that the plant or machinery may have been purchased from a dealer, wholesaler or retailer rather than a manufacturer does not prevent it from being ‘unused and not second-hand'.

You can accept that plant or machinery is ‘unused and not second-hand' even if it has undergone some limited use for the purposes of testing, delivery or demonstration.

For example, a car may have been driven a limited number of miles for the purposes of testing or delivery, test driven by a potential purchaser, or used as a demonstration car. This would not prevent the car from being ‘unused and not second-hand'.

The fact that vehicles may have been pre-registered to a dealer does not prevent you from treating them as 'unused and not second-hand'.

Where capital expenditure is incurred on upgrading or improving an existing asset by adding new parts, that expenditure may qualify for an FYA. This includes capital expenditure on improving existing software where PMAs are available for such expenditure (CA23410).

Hunter and Ball Ltd operates a stone crushing machine as part of its construction business. On 1 April 2025 and in response to increased demand, it installs upgraded new and unused liners, jaws and impact plates to improve crushing efficiency and throughput. The new parts are added to the existing machine. The cost of providing the new parts is capital expenditure because they have improved and upgraded the existing machine. In its accounting period ending 31 December 2025, the company will be able to claim full expensing in respect of this expenditure.