Enhanced first year allowances for investment in new plant or machinery within designated assisted areas within Enterprise Zones were introduced in 2012 and were initially available for investment over a five-year period, later extended to eight years.

The period commences from when the area is treated as designated.

The original eight-year timeframe expires on 31 March 2020. The government has now announced that these capital allowances will remain available for expenditure incurred in relation to all areas, whenever designated, until at least 31 March 2021.

The capital allowances legislation in respect of Enterprise Zones is at Sections 45K to 45N Capital Allowances Act 2001.

This makes available an enhanced 100% first year allowance for qualifying expenditure incurred by companies on plant or machinery for use primarily in designated assisted areas within Enterprise Zones, subject to certain conditions.

The Enterprise Zone must also be located within an Assisted Area which is specified within Section 1 Industrial Development Act 1982 or Northern Ireland. The qualifying expenditure must be incurred within a period of eight years beginning with the date the specific area is treated as having been designated.

Secondary legislation will be introduced to ensure that the enhanced first year capital allowance remains available for expenditure incurred in relation to all designated assisted areas, whenever designated, until at least 31 March 2021.