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B3.305 Qualifying expenditure for plant and machinery allowances—general

As stated in B3.303, the general rule is that expenditure qualifies for plant and machinery allowances (ie it is 'qualifying expenditure') if:

1. Ìý

   •ÌýÌýÌýÌý it is capital expenditure on the provision of plant or machinery wholly or partly for the purposes of the qualifying activity carried on by the person incurring the expenditure, and

2. Ìý

   •ÌýÌýÌýÌý the person incurring the expenditure owns the plant or machinery as a result of incurring it¹

The general rule is affected by the other provisions of the legislation, particularly those described in B3.308–B3.311.

It should be noted that capital allowances may be denied in circumstances where, looking at the matter as a whole, the purpose of the expenditure is not the acquisition of plant and machinery, but the obtaining of capital allowances under a transaction that has no commercial reality; see B3.303.

Allowances are given on the expenditure exclusive of VAT except in the case of a business which is partly exempt or not registered for VAT