Ilyas Patel Accountants in Preston
What’s the definition of ‘plant and machinery’? Find out on today’s tax tip.
(3-minute read)
Plant and machinery is a broad term that refers to the items you can claim using capital allowances.
They’re existing items within the building that you use to maintain your business and include a broad variety of categories.
Some examples listed by HMRC are:
Integral features are:
Fixtures can be:
In accounting, plant and machinery are assets used by a business for the purpose of running it, but do not include stock in trade, the business premises or part of the business premises.
The difference between plant and machinery is that generally machinery will have moving working parts, and plant will not (though computers and similar electronic devices are considered machinery, despite having no moving parts). The working parts of a machine are also considered to be machinery.
For the purposes of claiming capital allowances, which are expenditure a company can claim against taxable profit, most tangible capital assets used in the course of a business can be classed as plant and machinery.
There is no exhaustive list of plant and machinery assets, and whether an item qualifies for capital allowances depends on its use for your business.
Some examples of assets which may qualify for either the super-deduction or the 50% FYA include, but are not limited to:
As you can see, it’s a wide-ranging classification as this list includes vehicles, miscellaneous equipment and machinery as well as furniture.
If you’re running a business that maintains a large fleet of vehicles, equipment, machinery, or tools, it’s important to value your assets.
It’s also important to keep receipts of any expenditure to claim back the costs.
We have posted a series of articles to better inform you of the benefits of claiming capital allowances and the types of reliefs available:
Speak to us and we will help you get the best savings. Don’t miss out on this valuable tax-saving tip!
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