Recent news The Budget on 23 March 2011 announced a number of capital allowances changes effective from April 2011: Short Life Assets (SLA) The disposal time limit on a SLA election will be extended from four to eight years. This only relates to assets qualifying as general pool plant and machinery. Furnished Holiday Lettings (FHL) As previously announced, the use of loss relief from FHL will be restricted so it can only be set against income from the same FHL business. Additionally, the FHL business will be split into UK only and EEA only. Business Premises Renovation Allowances (BPRA) The regime is extended by a further 5 years to April 2017 This 100% allowance is available for renovating and converting empty commercial properties in certain disadvantaged areas. The Budget also announced a number of changes subject to future legislation and consultation. Enterprise Zones The government announced the creation of between 10 and 21 Enterprise Zones, including 1 in London. It will consider the scope for "introducing enhanced capital allowances to support zones in assisted areas where there is a strong focus on high value manufacturing". Office of Tax Simplification (OTS) As part of the OTS review, Land Remediation Relief, Flat Conversion Allowances and Safety at Sports Ground capital allowances to potentially be abolished after 2012. Feed-in tariffs (FIT) and Renewable Heat Incentives (RHI) Consultation on the appropriate capital allowances rate for expenditure incurred by businesses on generating equipment used for FIT and the RHI scheme. Anti Avoidance Consultation in May 2011 on replacing the existing test for the application of the capital allowances anti-avoidance rules. Consultation in May 2011 on introducing a requirement that businesses pool their expenditure on fixtures within a short period after acquisition in order to qualify for capital allowances. As announced on 9 March 2011, the Government will introduce legislation to counter avoidance involving the leasing of plant or machinery where taxpayers claim capital allowances twice on one amount of expenditure. Enhanced Capital Allowances Qualifying technology list to be updated in Summer 2011 to include the addition of a new technology - energy efficient hand dryers. Also the qualifying criteria for automatic metering and targeting equipment will be simplified. Other issues The main rate of corporation tax will fall to 26% from 1 April 2011 (previously announced at 27%) with a further 1% drop annually until 2014/15 when the rate will be 23% The small profits rate of corporation tax will fall to 20% from 1 April 2011. IBA and HBA abolished from April 2011 Confirmation that General Pool Plant writing down allowances will fall to 18% from April 2012. Confirmation that Special Rate Pool writing down allowances will fall to 8% from April 2012. (References above to April 2011 or 2012 mean 1 April 2011 or 2012 for corporation tax and 6 April 2011 or 2012 for income tax, unless otherwise stated.) Top of page