Capital allowances changes for 2012

The government announced a number of changes to the capital allowances regime which will take effect this year. The three major changes are summarised below.

1. Reduction in main and special rates of WDAs

For accounting periods ending on or after 31 March 2012 (corporates) or 5 April 2012 (non-corporates) the main pool rate of writing-down allowance (WDA) will fall from 20% to 18% (FA 2011 s 10).

Furthermore for expenditure incurred on or after 1 April 2012 (corporates) or 6 April 2012 (non-corporates) the reduced ‘special rate’ of WDAs for integral features within buildings long-life assets thermal insulation added to existing buildings and cars with carbon dioxide emissions in excess...