Enhanced capital allowances

The Government has announced the introduction of an enhanced capital allowance in the year of acquisition of 40 per cent for one year beginning April 2009.  This is in addition to the Annual Investment Allowance on the first £50,000 of expenditure.

Stephen Herring Senior, Tax Partner at BDO LLP comments:  “The doubling of the main rate of capital allowances is certainly welcome and should encourage businesses to bring forward new capital investment in plant and machinery.  The benefit however, will only be felt by businesses spending more than £50,000 (the current Annual Investment Allowance) on qualifying capital expenditure.”

Stephen further comments: “Although the doubling of the main rate of capital allowances to 40 per cent for a twelve month period is welcome, the constant tinkering with capital allowance rates does result in significant added administration. It also adds complexity for many businesses in having to track when capital expenditure is deemed to take place for taxation purposes and ensuring the correct allowances are claimed.”

-Ends-

For more information or to talk to one of our tax experts, please call the
Budget Hotline:
020 7893 2717
Or contact Matthew Longbottom at BDO on 07976 198 786 or email matthew.longbottom@bdo.co.uk

http://www.bdo.uk.com/services/tax-services/budget-2009.html

Budget opinions and comments are also streaming in real time on Twitter:
Look up BDOACCOUNTANT and follow us.

Notes to editors:

BDO LLP operates across the UK with over 3,000 partners and staff. BDO LLP is a UK limited liability partnership and the UK Member Firm of BDO International. BDO international is a world-wide network of public accounting firms, called BDO Member Firms. Each BDO Member Firm is an independent legal entity in its own country. The network is coordinated by BDO Global Coordination B.V., incorporated in The Netherlands, with its statutory seat in Eindhoven (trade register registration number 33205251) and with an office at Boulevard de la Woluwe 60, 1200 Brussels, Belgium, where the International Executive Office is located. In the UK the Belfast Firm is operated by a separate Partnership known as BDO - Belfast.

BDO LLP and BDO - Belfast are both authorised and regulated by the Financial Services Authority to conduct investment business.

BDO is an award winning firm.  Recent achievements include:

Best Workplace UK - Financial Times 2008
Audit Team of the Year – Accountancy Age Awards 2008
Tax Team of the Year – Accountancy Age Awards 2008
Corporate Finance Deal of the Year – Accountancy Age Awards 2008
100 Best Companies to Work For - The Sunday Times 2008
The Women of Achievement Award –  Women in the City 2008
Business Superbrand - Business Superbrands 2008