Section 52 First-year allowances
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(1) A person is entitled to a first-year allowance in respect of first-year qualifying expenditure if—
(a) the expenditure is incurred in a chargeable period to which this Act applies, and
(b) the person owns the plant or machinery at some time during that chargeable period.
(2) Any first-year allowance is made for the chargeable period in which the first-year qualifying expenditure is incurred.
(3) The amount of the allowance is a percentage of the first-year qualifying expenditure in respect of which the allowance is made, as shown in the Table—
TABLE
Amount of first-year allowances
| Type of First-year qualifying expenditure | Amount |
| ...1 | ...1 |
| [Expenditure qualifying under section 44 (expenditure incurred by small or medium-sized enterprises)]2 | [40%]2 |
| ...3 | ...3 |
| [Expenditure qualifying under section 45A (expenditure on energy-saving plant or machinery)]4 | [100%]4 |
| [Expenditure qualifying under section 45D (expenditure on cars with low CO2 emissions)]5 | [100%]5 |
| [Expenditure qualifying under section 45E (expenditure on plant or machinery for gas refuelling station)]6 | [100%]6 |
| [Expenditure qualifying under section 45F (expenditure for use wholly in a ring fence trade)]7 | [100%]7 |
| [Expenditure qualifiying under section 45H (expenditure on environmentally beneficial plant or machinery)]8 | [100%]8 |
[[In the case of expenditure qualifying under section 44, see also—
(a) section 142 of the Finance Act 2004 (substitution of 50% in the case of expenditure incurred by a small enterprise in 2004-05 or financial year 2004);
(b) section 30 of the Finance Act 2006 (substitution of 50% in the case of expenditure incurred by a small enterprise in 2006-07 or financial year 2006).]9
[(c) section 37 of the Finance Act 2007 (substitution of 50% in the case of expenditure incurred by a small enterprise in 2007-08 or financial year 2007).]10]2
Amendments
1 Entry relating to section 40 omitted by Finance Act 2008 section 76(5)(d) from 21 July 2008.
2 Omitted by Finance Act 2008 section 75(3)(d) in relation to expenditure incurred on or after 1 April 2008 (for corporation tax purposes) and 6 April 2008 (for income tax purposes).
However, where a business incurs an additional VAT liability (under VAT Capital Goods Scheme) on or after those dates and the original expenditure was first-year qualifying expenditure by virtue of section 44 then Part 2 Chapter 18 will still apply as if the entry and those words had not been omitted. Please refer to Finance Act 2008 sections 75(6) and (7) for details.
3 Entry relating to section 45 omitted by Finance Act 2008 section 76(5)(d) from 21 July 2008.
4 Entry relating to section 45A inserted by Finance Act 2001 section 65 and Schedule 17 para 4, with effect as respects allowances and charges falling to be made for chargeable periods ending on or after 6 April 2001 (for income tax purposes) and 1 April 2001 (for corporation tax purposes).
5 Entry relating to section 45D inserted by Finance Act 2002 section 59 and Schedule 19 para 5 in relation to expenditure incurred on or after 17 April 2002.
6 Entry relating to section 45E inserted by Finance Act 2002 section 61 and Schedule 20 para 5 in relation to expenditure incurred on or after 17 April 2002.
7 Entry relating to section 45F substituted by Finance Act 2008 section 108(1) in relation to expenditure incurred on or after 12 March 2008.
8 Entry relation to section 45H inserted by Finance Act 2003 section 167 and Schedule 30 para 5 in relation to expenditure incurred on or after 1 April 2003.
9 Substituted by Finance Act 2006 section 30(3) from 19 July 2006.
10 Inserted by Finance Act 2007 section 37(3) from 19 July 2007.
(4) A person who is entitled to a first-year allowance may claim the allowance in respect of the whole or a part of the first-year qualifying expenditure.
(5) Subsection (1) needs to be read with section 236 (first-year allowances in respect of additional VAT liabilities) and is subject to—
[section 70DA(2) (transfer and long funding leaseback: no first-year allowance for lessee),]1
section 205 (reduction of first-year allowance if plant or machinery provided partly for purposes other than those of qualifying activity),
section 210 (reduction of first-year allowance if it appears that a partial depreciation subsidy is or will be payable), and sections 217[, 229A(2)]2 ...3 and 241 (anti-avoidance: no first-year allowance in certain cases).
Amendments
1 Inserted by Finance Act 2009 section 64 and Schedule 32 para 13 in relation to cases where the commencement of the term of the lease referred to in section 70DA(1)(b) is on or after 13 November 2008.
2 Inserted by Finance Act 2009 section 64 and Schedule 32 para 19 in relation to cases where the contract referred to in section 229A(1)(c) is entered into on or after 13 November 2008.
3 Omitted by Finance Act 2008 section 55 and Schedule 20 para 6(3) in the case of plant or machinery which is the subject of a sale and finance leaseback (as defined in section 221 where the date of the transaction is on or after 9 October 2007.
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