EIM36520 | Deductions from earnings: capital allowances: conditions to be met if capital allowances are to be given

Section 36 CAA 2001

General conditions relating to capital allowances for employees

The Capital Allowance legislation in Part 2, CAA01 (Plant and machinery allowances – CA20000) applies in the same way to offices and employments as it does to trades, but this is subject to the following two additional rules which apply only to employees and office holders.

An employee or office holder can only claim allowances if the asset:

• is not a cycle or motor vehicle (see EIM36750); and

• was ‘necessarily provided’ for use in the performance of duties of the employment or office (see EIM36540).

If the employer in fact meets the expenditure, directly or indirectly, the employee would not usually be eligible to claim allowances. Instead, the employer may be eligible to claim allowances (see CA14100).

If the employee or office holder uses the qualifying asset partly for private purposes an apportionment should be made (see CA27005).