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The Budget includes an increase to the Annual Investment Allowance (AIA) for two years up to £1 million. This is in relation to qualifying expenditure incurred from 1 January 2019, currently at £200,000 per year. Additional changes to the rules outlined include the following:

  • Reduction to the rate of writing down allowance on the special rate pool of plant and machinery. This includes long-life assets, thermal insulation, integral features, and expenditure on cars with CO2 emissions of more than 110g/km, from 8% to 6% in April 2019.
  • Confirmation and clarification as to the costs of altering land, for the purposes of installing qualifying plant or machinery for capital allowances, for claims on or after 29 October 2018.
  • The 100% first year allowance and first year tax credits for products on the Energy Technology List and Water Technology List will come to an end from April 2020.
  • An extension to the current 100% first year allowance for expenditure incurred on electric charge-point equipment until 2023.
  • The introduction of a new capital allowances regime for structures and buildings will apply to new non-residential structures and buildings. Relief will be provided on eligible construction costs incurred on or after 29 October 2018, at an annual rate of 2% on a straight-line basis.