Summary of Capital Allowances available in tax year 2011/12

Click here for Capital Allowances for tax year 2012/13

The following capital expenditure may be deducted from income in calculating taxable profits:

• ANNUAL INVESTMENT ALLOWANCE: The full amount of any capital expenditure up to maximum £100,000 per year on most new plant and machinery except for cars. (This figure must be reduced proportionately for shorter accounting periods) Note: the maximum amount reduced to £25,000 from April 2012
• FIRST YEAR ALLOWANCE: The full amount of capital expenditure on certain specified environmentally friendly assets. Designated assets include cars with CO₂ emissions not more than 110 g/km and new zero emission electric vehicles.
• "MAIN POOL": 20% of the cost of second hand capital assets purchased and new assets not qualifying for First Year or Annual Investment allowances. Most cars fall into this category, unless they fall into a special category (see below) or attract a first year allowance by virtue of low emissions (see above). Where only part of the purchase cost of an asset is deductible against tax, the remainder of the purchase cost or 'written down value' is carried forward to the next tax year. Note: the rate reduced to 18% from April 2012
• 20% of the residual "written down value" of assets falling into the above category and purchased in a previous tax year.
• "SPECIAL RATE POOL": 10% of the purchase cost of certain designated assets including cars with CO₂ emissions over 160g/km. Note: this rate reduced to 8% from April 2012
• 10% of the residual "written down value" of assets falling into the above category which were purchased in a previous tax year.

NOTE: Hybrid rates and Annual Investment Allowances will apply for accounting years which span the two tax years 2011/12 and 2012/13. For details see Capital Allowances for tax year 2012/13