The Budget on 19 March 2014 announced a number of capital allowances changes effective from April 2014.
Annual Investment Allowance
- Increase in the annual investment allowance (AIA) to £500,000 from 1 April 2014 to 31 December 2015 when it will return to £25,000.
Business Premises Renovation Allowances
- The scope of qualifying BPRA expenditure is restricted to actual costs of construction and associated professional fees, with relief for the latter restricted to 5% of total actual costs.
- Claims for BPRA will be prevented if another form of State aid has been or will be received.
- Period within which balancing adjustments must be made is reduced from 7 to 5 years.
- Extension to 31 March 2020 of the period enhanced capital allowances (ECAs) are available in Enterprise Zones.
Enhanced Capital Allowances
- The list of designated energy saving and water efficient technologies is to be updated in Summer 2014, significantly to include two new technologies, Active chilled beams and desiccant air dryers with energy saving controls.
- The main rate of corporation tax will reduce to 21% from April 2014
- The payable Research & Development (R&D) tax credit for loss making small and medium sized enterprises (SMEs) will increase from, 11% to 14.5%.
(References above to April 2014 or mean 1 April 2014 or 2014 for corporation tax and 6 April 2014 or 2014 for income tax, unless otherwise stated.)