The purpose of this article is to provide a summary of recent changes and announcements relating to capital allowances, including measures in Finance Bill 2021. At the time of writing, FB 2021 has yet to become law and so is subject to change.

Please check the CAs Quick Link for updates and for links to detailed commentary and practical resources, including a decision tree to help you to navigate your way through the conditions for the super-deduction.

New temporary FYAs (the super-deduction)

Legislation included in FB 2021 (cl. 9–14) introduces the following new temporary first-year allowances (FYAs):

• the super-deduction. This gives a 130% FYA for expenditure on plant and machinery (P&M) falling within the main pool;