Capital Allowances

What EY can do for you

The area of capital allowances is complex, especially as there is no definition of qualifying Plant and Machinery (P&M) in current tax legislation or an approved list of qualifying assets. There are a number of conditions to be satisfied, most of which have been established through years of case law and Revenue precedence.

Effective capital allowance management can have the benefit of maximising your entitled tax relief, resulting in significant tax savings. A capital allowance review can also result in amendments of previous tax returns to recover unclaimed allowances from prior years.

How EY can help

EY’s dedicated group of capital allowance experts and chartered quantity surveyors have the correct blend of skills required to prepare robust and justifiably maximised capital allowances claims. 

We have extensive experience of preparing capital allowances claims using a tried and tested methodology and we have developed our ground-breaking Capital Allowances Automated Review Tool (CAART) which uses machine learning and artificial intelligence to help determine the tax treatment of capital expenditure. 

We provide advice in the preparation of the following capital allowances claims:

• Wear and tear allowances for qualifying plant and machinery – 12.5% over 8 years.
• Industrial buildings allowances – 4% over 25 years.
• Accelerated capital allowances for certain energy efficient equipment – 100% in year 1.
• Purchase claims - purchase price apportionments, following real estate acquisition.
• Look back claims – potential repayment of tax (depending on the facts, it may be possible to go back up to 4 years to amend a company’s tax return and associated capital allowances).
• Analysis for R&D claims – both for plant and machinery and industrial buildings.