In Budget 2006, the government announced that
capital allowances in the form of first year
allowances (FYAs) on plant and machinery
acquisitions would be at the rate of 50%
for small businesses. The normal rate is
40%. The increased rate will apply for 12
months from April 2006. The rates apply for
unincorporated businesses from 6 April and
for companies from 1 April 2006.
The increase in allowances is supposed to,
amongst other things, be a sweetener for
the withdrawal of the 0% starting rate of
corporation tax.
Internet link:
For details of the changes
see HMRC budget notice
HMRC budget notice 2
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