Even though the Annual Investment Allowance and full expensing are synonymous with each other, significant differences exist between each. We summarise those differences and also for balance, the similarities.

The introduction of full expensing and the 50% first-year allowance, means understanding the tax computation has got more complicated. Here, we demonstrate how all four categories of plant and machinery allowances interact.

Full expensing, including the 50% first-year allowance, is not available to partnerships or individuals. It is only available to companies chargeable to UK corporation tax. However, even for such companies, the full expensing legislation falls short in certain circumstances.

Capital contributions never go out of fashion. A capital contribution made to a tenant’s fit-out, is a tax efficient incentive for a landlord, if correctly procured. Tenants can also benefit from capital contributions, in a less obvious way.

The working-from-home phenomenon has changed how office landlords approach office floor refurbishments. Many Grade A office floors are now being fitted out by landlords to include loose furniture. This has inadvertently brought into play the long funding lease rules.

Recent budgets introduced significant changes to the capital allowances system, including some big surprises on the day. Autumn Budget 2024 was a tame affair, capital allowances-wise. However, consultations and initiatives were announced.