Published 50 days prior to the election, the Spring Budget 2015 included some nice headlines but not much to report in terms of capital allowances.


Annual Investment Allowance (AIA)


The 100% AIA is due to fall from £500,000 to £25,000 on 1 January 2016. 


The Chancellor announced this would be revisited in Autumn 2015, but it would not fall as low as £25,000. Having been £50,000, £100,000 and £250,000 in the past, it is hard to predict what we will see next year.


Enterprise Zone Allowances (EZA)


The EZA is a 100% allowance available to companies installing plant and machinery in designated assisted areas.  Not all Enterprise Zones (EZ’s) attract the 100% allowance and it is also not available to a property business.


The following zones are being extended:- Manchester, Mersey Waters, Humber, Tees Valley (Prairie), Oxford Science Vale, Discovery Park in Kent, MIRA near Nuneaton.  Two sites at Leeds EZ’s will be designated to include the 100% EZA. 


New zones will be created in Blackpool and Plymouth.  It is not yet clear whether they will attract the 100 EZA.


Enhanced Capital Allowances (ECA)


The list of qualifying energy-saving and water-efficient technologies will be updated during Summer 2015.




This is unlikely to apply to most tax-payers, but new legislation was introduced on 26 February 2015.  Where a person acquires an item of plant and machinery without incurring capital expenditure and for certain transactions between connected parties or sale and leaseback transactions, the expenditure qualifying for capital allowances will now be restricted to nil, unless the plant or machinery was acquired for revenue expenditure or on its manufacture, at an arm’s length price.

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