Capital allowances legislation to hit business

Advisers have warned that draft legislation for changes to capital allowances will hit businesses harder than they initially thought when the changes were first announced in the Budget.

KPMG's head of capital allowances David Woodward said his initial analysis of the draft legislation shows that 'integral fixtures' will now be redefined as 'integral features'.

Essentially this means that far more plant equipment, such as wiring, will now only be moved into a new band that will only attract 10% relief as opposed to the original 20%.

The changes were met with fierce opposition when originally announced, especially from manufacturers and capital-intensive industries.

The new changes, outlined in the draft legislation, are set to have an even deeper impact on businesses.

Further reading:

Read the the draft legislation here

Investment blow to manufacturing