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Sixthly Water etc FA 2003, section 167 and sch 30 continues the trend by creating 100% first year allowances for expenditure on plant or machinery which is regarded as environmentally beneficial (CAA 2001, section 45H). Section 45H is an enabling provision and the Treasury are given regulation making powers to describe the various types of plant or machinery which will qualify—section 45H(3) and (4). Section 45H(5) refers to a list drawn up by the Secretary of State, presumably of the Environment. The relevant press release Rev BN 26 refers to expenditure reducing water use or improving water quality and states that the relevant list is available from www.eca.gov.uk. The rules apply to expenditure on or after 1 April 2003. Section 45H(1) adds that the machinery must be unused and not second hand, not be a long life asset and not be excluded by the general rules in section 46. |
24A.2.5.1.1 Small and Medium-Sized Company The Companies Act definition of ‘small and medium-sized’ is used. If it is an unincorporated business, it must satisfy these conditions as if it were a company.207 Section 255: a company is a medium-sized company (and a fortiori a small company) if its business satisfies any two of the following three conditions: a turnover of not more than £11.2 m; assets of not more than £5.6 m; and no more than 250 employees. Where the business is carried on by a company which is a member of a group, the group must not be a large group. In deciding whether the group is medium-sized or a large group, the numbers used for the single company are applied to the group as a whole.208 Section 256: the cost of this relief for 1998–1999 is put at £300 m. |
24A.2.5.2 Small Enterprises and Temporary ICT Allowance |
Enterprises are small if they satisfy two of the three tests—turnover £2.8 m, assets £1.4 m and 50 employees. This subset of small and medium-sized enterprises matters because FA 2000 provides a 100% first year allowance for expenditure by small enterprises on information and communications technology (ICT); the expenditure must be incurred between 1 April 2000 and 31 March 2003.209 Section 258: the main qualifying assets are computers. The elements of ICT are computers and associated equipment, internet-enabled mobile phones and computer software;210 Section 259: the list may be redefined or added to by Treasury order.211 (Section 260). |
The rules on p 476 on expenditure by small companies on ICT are extended for a further 12 months—to 31 March 2004 by FA 2003, section 165. FA 2003, section 166 excludes expenditure on software made with a view to granting to another person a right to use or otherwise deal with the software in question, ie intended for sub-licensing. |
24A.5.2.3 Energy Saving: Any Size |
For chargeable periods ending on or after 6 April 2001 (1 April for corporation tax) 100% first year allowances are available for expenditure on Plant and Machinery which is energy saving.212 The plant must be new or if, second hand, unused. The definition of plant which is energy saving is left to Treasury regulation.213 The regulations may require certification that the |