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Some 500 days after the last Budget, new Chancellor Rishi Sunak announced some changes to capital allowances (11 March 2020), as noted below. 

Structures and Buildings Allowances (SBA)

• The SBA rate has been increased to 3% per year effective from 1 April 2020 (Corporation Tax) and 6 April 2020 (Income Tax).  
  • This is expected to cost the Treasury an extra £1bn to April 2025.
• Some minor housekeeping has also been undertaken, including that the Allowances Statement can include the date of an oral contract, if no written contract exists.  
  • This is deemed to have applied since the rules were introduced in October 2018.
• As a reminder, the original SBA was a flat rate 2% allowance.
• SBA relates to new non-residential structures and buildings for works where the contracts for physical construction are dated on or after 29 October 2018.
• SBA is typically based on the original cost of construction and will be available:
  • When a structure or building first comes into non-residential use.
  • On various assets including offices, retail and wholesale premises, hotels, nursing homes, factories, warehouses, roads, fences, wall, bridges and tunnels.  
• SBA is not available for expenditure which qualifies for Plant and Machinery Allowances (PMA); Land and associated costs; or Dwellings (which include Furnished Holiday Lettings)

Enterprise Zone Allowances (EZA)

• For all designated zones where EZA applies, the 100% allowance will remain available for expenditure incurred until at least 31 March 2021.  
  • This overcomes the situation for the earliest zones, designated in 2012, where the opportunity to claim EZA would have otherwise ended on 31 March 2020.
• As a reminder, EZA is a 100% allowance available to companies installing new plant and machinery in designated assisted areas.  Unfortunately EZA is not available to a property business.

Also relevant but not necessarily new:

• Enhanced Capital Allowances (ECA) – For energy and water efficient plant, the 100% first year allowance and first year tax credit will end in April 2020. 
• Corporation Tax Rate (CT) – The CT rate from 1 April 2020 will be 19%, with the proposed fall to 17% being scrapped. 

• Annual Investment Allowance (AIA)
  • The 100% AIA has been £1,000,000 from 1 January 2019 and will apply until 31 December 2020.
  • No announcement was made about maintaining this level, so the AIA may return to £200,000 on 1 January 2021.  However there could be an Autumn Budget, so a further change to AIA may occur.
    • As a reminder, the AIA allows a 100% deduction for qualifying plant and machinery expenditure upto the AIA limit incurred in a company or group of companies.
    • Above the AIA, the usual capital allowances writing down allowances of 18% and 6% apply.

I don’t typically deal with capital allowances on cars, but for the sake of completeness:

First Year Allowances (FYA) for business cars

• From April 2021, 100% FYAs will apply to zero emission vehicles (ZEVs) only.
• The main rate writing down allowance (WDA) of 18% will apply to cars with emissions up to 50g/km. 
• The special rate WDA of 6% will apply to higher polluting cars with emissions above 50g/km. 
• 100% FYAs for zero emission goods vehicles and natural gas and hydrogen refuelling equipment will also be extended to April 2025.