Capital allowances: permanent full expensing for leased assets
The Chancellor announced that the government seeks to extend full expensing to assets for leasing when fiscal conditions allow. Draft legislation will be published shortly.
- Full expensing allows companies to claim an unlimited 100% first-year allowance for expenditure on new equipment falling into the main pool;
- Companies investing in special rate assets (such as integral fixtures and fittings) can claim an unlimited 50% first-year allowance in the year of investment; and
- Full expensing only applies to companies and currently excludes plant and machinery purchased for leasing purposes, as well as cars and second-hand assets, ie all equipment must be brand new.
VAT
With effect from 1 April 2024, the VAT registration threshold has been increased from £85,000 to £90,000 and the deregistration threshold has increased from £83,000 to £88,000.
This will ensure that the UK continues to have one of the highest thresholds in the OECD. It is anticipated that more than 28,000 businesses will benefit from this measure in 2024/25.
And finally…
Alcohol duties are frozen once again until 1 February 2025 but airport passenger duty for those flying in first, business or premium economy are being increased from 2025/26.
Fuel duties are being frozen again for a further twelve months.
