Capital Allowances Act 2001 section 39

First-year allowances available for certain types of qualifying expenditure only

Section 39 restricts the availability of first-year allowances to specific categories of qualifying expenditure, ensuring that only certain types of capital spending on plant and machinery can benefit from accelerated tax relief.

• First-year allowances are not generally available — they can only be claimed where the expenditure falls within one of the specified qualifying categories listed in the legislation.
• Qualifying categories include expenditure on low CO2 emission cars, zero-emission goods vehicles, gas refuelling station plant or machinery, and electric vehicle charging point equipment.
• Expenditure on plant and machinery used wholly in a ring fence trade (broadly, UK oil and gas extraction) and expenditure on plant and machinery for use in designated assisted areas or freeport tax sites also qualifies.
• If expenditure does not fall within one of these defined categories, the taxpayer must instead claim relief through the standard writing-down allowance route rather than the more generous first-year allowance.