Businesses can claim first year allowances (FYAs) on certain
types of plant and machinery. FYAs allow the business to claim up
to 100% of the expenditure incurred. There are, however, some
exclusions, for example for expenditure on long-life assets and
expenditure on plant or machinery for leasing. In contrast to the
100% allowance permitted for the annual investment allowance, there
is no limit on expenditure qualifying for FYAs.
Where expenditure is incurred on certain energy or
environmentally beneficial plant and machinery qualifying as FYA,
there is the opportunity to surrender losses generated by the
allowances in return for a tax repayment. Energy and
environmentally beneficial allowances are known as ECAs. Qualifying
expenditure for ECAs is restricted to assets listed on the energy
technology list and the water technology list, both of which were
updated on 5 July 2012. Broad headings are:
