CA23174AA | Plant and Machinery Allowance (PMA): First Year Allowance (FYA): Full expensing and 50% allowance for special rate expenditure: Introduction

F(NO.2)A23/S7

The Finance (No.2) Act 2023 introduced two FYAs:

• a 100% FYA for qualifying expenditure on the provision of main rate plant or machinery – known as full expensing; and

• a 50% FYA for qualifying expenditure on the provision of special rate plant or machinery.

CA23210 explains what expenditure is treated as special rate. Special rate expenditure may qualify for the 50% FYA but does not qualify for full expensing. Some cars are included on the list of special rate expenditure, but expenditure on cars is excluded from qualifying for these FYAs. Main rate expenditure is expenditure which is not special rate expenditure

CA23174AB explains the conditions that must be met for a claim to full expensing or the 50% FYA to be made and CA23174AD and CA23174AE explain how to treat the disposal of plant or machinery on which either allowance has been claimed.