Tax Tip: Tax-Deductible Plant

Reduce your taxable profits by claiming capital allowances for all the plant in your building, whether the building is in use for a trade or is an investment asset.

While a building in use as a factory qualifies for tax allowances at a rate of 4% per annum for 25 years don’t neglect to claim capital allowances on the plant that is in the building. Even if your building is not in use as a factory you may still be able to claim capital allowances on a significant portion of its cost if the plant in the building is correctly identified.

Tax relief is given on the cost of plant at a rate of 12.5% per annum over 8 years. If the plant is in use for the trade the allowance will be given against the trading profits. If the plant is in use in a rented building then the allowances will be given against the rental income.

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Joe McAvoy

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