My company has recently taken on an industrial unit that needs extensive fitting-out before it can be used by the business. How can I ensure that all the fittings I use will qualify for the maximum amount of capital allowances?
The cost of fittings that qualify as plant or integral features can be set against your company’s Annual Investment Allowance (AIA), which will give 100% capital allowance in the year of acquisition. The AIA cap has been increased to £100,000 per year for expenditure incurred on and after 1 April 2010. Plant is broadly something that is not fixed permanently to the building, such as shelves or display units. Integral features are fixed to the building and fall into these five categories:
- Cold water systems (not hot)
- Electrical systems (including lighting)
- Space or water heating systems, including a powered system of ventilation, air cooling or air purification
- Lifts, escalators or moving walkways
- External solar shading
If the fitment does not qualify as plant or integral features it can qualify for 100% enhanced capital allowance (ECA) if it has energy or water saving qualities, and it has been included on the approved ECA list atwww.eca.gov.uk.