Capital Allowances Act 2001 section 45K

Expenditure on plant and machinery for use in designated assisted areas

Section 45K provides for first-year allowances (100% write-off) available to companies that spend on new plant or machinery primarily for use in designated assisted areas, typically enterprise zones within development areas or Northern Ireland.

• Expenditure must be on new (not second-hand) plant or machinery for primary use in a designated assisted area, incurred within the relevant qualifying period — from the date the area is designated until the later of the day before the eighth anniversary of that date or 31 March 2021
• The company must be within the charge to corporation tax and the expenditure must relate to a trade or a mine, transport undertaking or similar qualifying activity
• The expenditure must be for a new business, an expansion of an existing business, or a fundamental change in a product, production process or service — and must not simply be replacement expenditure for existing plant performing the same function
• Where expenditure relates to a fundamental change in a product, process or service, it only qualifies if the amount exceeds the depreciation of the relevant existing plant or machinery over the preceding three years