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For expenditure incurred from 01/04/21 – 31/03/2023, limited companies can claim 130% capital allowances on qualifying plant and machinery.
There is a Super deduction allowance of 130% on new plant and machinery that normally qualify for the 18% Main rate WDA.
There is also a Special Rate FYA of 50% on new plant and machinery that normally qualify for 6% WDA.
To claim either allowance within Business Tax for a limited company, go to Edit | Capital Allowances | A
In order to select the option to claim the allowances the following conditions must be met:
When they are both met, the option to claim Super Deduction or the 50% FYA will become visible and enabled to select:
When selecting 'Qualifies for super-deduction allowance', this can be left non-pooled or added to the General Pool. In both instances the asset will receive 130% Super Deduction Allowance in the CTAP which will be printed in the Tax Computation and the Capital Allowances report.
The Addition field shows the Addition expenditure value.
The WDA/FYA shows the 130% Super deduction amount on the expenditure:
In the General Pool column:
The new row Additions (FYA 130%) shows the Addition expenditure value.
The new row FYA (130%) shows the Super Deduction of 130% expenditure value:
When qualifying expenditure falls in a CTAP which straddles 01/04/2023 then the amount of Super Deduction Allowance is apportioned dependant on the CTAP dates.
The number of days in the CTAP that fall before 01/04/2023 are used to claim 130% FYA, and the number of days that fall on/after 01/04/2023 of the CTAP are entitled to 100% FYA.
The system will automatically calculate this for CTAPs that straddle the 01/04/2023.
When selecting 'Qualifies for 50% FYA', this can be left non-pooled or added to the Special Rate Pool. In both instances the asset will receive 50% FYA and the balancing 50% of the expenditure will be carried forward and receive 6% WDA in the following CTAP.
The 50% FYA will also be printed in the Tax Computation and the Capital Allowances report.
The Addition field shows the Addition expenditure value.
The WDA/FYA field shows the 50% FYA
The WDV C/fwd is the balance of the Addition expenditure of 50% that will be eligible for 6% WDA in the following CTAP.
Applies at Special Rate is auto selected as it is a SR asset:
In the Special rate column:
The new field Additions (FYA 50%) shows the Addition value.
The new field FYA (50%) shows the SR allowance of 50%
The Pool C/fwd has the balance of the Addition expenditure of 50% added to it, that will then be eligible for 6% WDA in the following CTAP:
When an addition has a Super Deduction or 50% FYA claim, in the CTAP where the disposal occurs there will be a balancing charge to pay regardless of whether the asset was pooled or non-pooled.
If the disposal is in a CTAP where it ends on or before 31/03/2023, there will be a 130% balancing charge incurred. Even if the asset was added to the General Pool, there will still be a charge incurred in the CTAP.
If the disposal falls in a CTAP which straddles 01/04/2023 then the balancing charge is apportioned dependant on the CTAP dates.
The number of days in the CTAP that fall before 01/04/2023 are used to apply 130% balancing charge, and the number of days that fall on/after 01/04/2023 of the CTAP are used to apply 100% balancing charge. The system will automatically calculate this for CTAPs that straddle the 01/04/2023.
If the disposal falls in a CTAP that starts on/after 01/04/2023 then the balancing charge will be 100%
When there is a disposal where 50% FYA was claimed, 50% of the disposal is charged as a Balancing charge, and 50% goes to the Disposal.
If the expenditure was non-pooled the 50% Balancing charge is added to the (50% Disposal Proceeds – WDV b/fwd) to get the Net total (which would normally be 0 or a Balancing Allowance).
If the expenditure was pooled then there is a 50% Balancing Charge applied in the CTAP regardless, and the remaining 50% Disposal is added to the Pool which may result in an additional balancing charge or just reduce the Pool B/fwd dependant on the values in the Special Rate pool.