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Manufacturing industry news
News Release from: IQ Finance Plc
Edited by the Manufacturingtalk Editorial
Team on 30 April 2004
100% first-year allowance for IT
purchases stopped
With effect from 1st April 2004, UK SMEs (under GBP 11.2m turnover and less than 50 employees) will no longer be able to claim 100% first year writing down allowances on IT.
With effect from 1st April 2004, small to medium enterprises (under GBP 11.2m turnover and less than 50 employees) will no longer be able to claim 100% first year writing down allowances on information and communication technology purchases Instead, the first year allowance returns to the previous 50% level with companies falling into the "large company" bracket (over GBP 11.2m T/O and more than 50 employees) able to claim 40%
Subsequent years' allowances then fall to 25% of the reducing balance.
This once again highlights the tax efficiency of leasing versus capital purchase, where lease rentals are 100% allowable against taxable income.
This effectively enables any company to offset 100% of the capital element against tax over the life of the lease, typically 3 years.
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