Draft Finance Bill – Capital Allowances

The Government has released the draft Finance Bill for 2015, and it contains some Capital Allowances changes.

 

Capital allowances for zero-emission goods vehicles, low emission cars and gas refuelling equipment. As announced at Budget 2014, legislation will be introduced to extend the 100% enhanced capital allowance (ECA) for zero-emission goods vehicles which was due to end in March 2015, to 31 March 2018 for companies and to 5 April 2018 for individuals and partnerships.

From 1 April 2015 for companies and 6 April 2015 for individuals and partnerships, the availability of the ECA will also be limited to businesses that do not also claim other state aids, such as the Government’s Plug-in Van Grant.

Secondary legislation will be introduced to extend the availability of ECAs for Low CO2 emission cars and gas refuelling equipment to 31 March 2018 for persons within the charge to income tax and corporation tax. (TIIN)

 

 

Capital allowances: extension of enhanced capital allowances for car and goods vehicles to 2018

 

Who is likely to be affected?

 

Businesses planning to purchase low CO2 emission cars, zero-emission goods vehicles, or

gas refuelling equipment for vehicles.

 

General description of the measure

 

Extension to March 2018 of three 100 per cent enhanced capital allowances (ECA) schemes – for expenditure incurred on low CO2 emission cars, zero-emission goods vehicles, or vehicle gas refuelling equipment – otherwise due to end in March 2015. In addition, the ECA for zero-emission goods vehicles will be unavailable where another form of State aid has, or will be, received. In the case of low CO2 emission cars the qualifying CO2 threshold will also be reduced.

 

Policy objective

 

These allowances are designed to support the Government objective of increasing the use of cleaner transport by business and reducing CO2 emissions.

 

Detailed proposal

 

For zero-emission goods vehicles the three year extension and State aid change will be made by primary legislation and will apply to qualifying expenditure incurred on or after 1 April 2015 for corporation tax (CT) and 6 April 2015 for income tax (IT). The scheme will end on 31 March 2018 for CT and 5 April 2018 for IT.

 

For gas refuelling equipment and low CO2 emission cars the three year extension, and reduction in CO2 thresholds to 75 gms for qualifying cars, will be made by secondary legislation early next year and will apply to expenditure incurred on or after 1 April 2015 for CT and IT.

 

Both schemes will end on 31 March 2018 for both CT and IT.

 

Primary legislation will be introduced to extend the availability of ECAs for zero-emission goods vehicles to 31 March 2018 for persons within the charge to CT and 5 April 2018 for IT.

In addition a rule will be introduced preventing claims to the ECA being made if another form

of State aid has or will be received, to bring the relief into line with other State aids.

 

Secondary legislation will be introduced to extend the availability of ECAs for Low CO2

emission cars and gas refuelling equipment to 31 March 2018 for persons within the charge

to CT and IT. In the case of cars the qualifying low emission threshold will also be reduced from 95 to 75 grams per kilometre driven.

 

 

 

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