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Vehicle scrappage allowance

The original scheme which pledged £300 million has recently received a welcome boost of a further £100 million funding. In announcing the decision Business Secretary Lord Mandelson said:

Alongside the increased funding, the government scheme which offers a £2,000 discount on a new vehicle purchase, funded partly from the government and partly by motor manufacturers is to be extended so that van owners with vehicles over 8 years old (so registered on or after 28 February 2002) rather than the current 10 year requirement can benefit.

Car owners will also get a boost, with the age qualification changed by 6 months to extend the benefits to cars registered on or before 29 February 2000 (V registration).

The scheme is still to end on 28 February 2010 or earlier if the funding runs out so act now.

Temporary first year allowance

Many businesses already obtain 100% relief on plant and machinery expenditure but there are situations when the Annual Investment Allowance of £50,000 per annum either has to be shared with another business or is simply insufficient for bigger plant intensive operations. In recognition of this and to encourage investment in the current economic climate, an extra capital allowance is available on a temporary basis.

The additional capital allowance is only available for expenditure incurred on plant and machinery for a qualifying activity in the 12 month period commencing 1 April 2009 for companies and 6 April 2009 for individuals and partnerships.

The temporary allowance takes the form of a first year allowance (FYA) of 40% instead of the normal 20% annual allowance. The FYA will not apply for expenditure on integral features, cars, long life assets and assets for leasing. However it is available to all sizes and structures of business so take advantage before it disappears.

News Highlights

Plant capital allowances

Have you installed new 'plant' in a building used for the purposes of your trade recently? The read on.

Every pound counts

The AIA has now been increased from £50,000 to £100,000 in the Finance Act 2010.

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