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HMRC internal manual

Capital Allowances Manual

Plant and Machinery Allowances (PMA): buildings and structures: expenditure on integral features: outline and policy background

CAA01/S33A, S33B


FA2008 introduced a new classification of integral features of a building or structure, expenditure on the provision or replacement of which qualifies for WDAs at the 10% special rate. The new classification applies to qualifying expenditure incurred on or after 1 April 2008 (CT) or 6 April 2008 (IT).


The introduction of this new classification was part of the wider ‘Business Tax Reform’ package, introduced by FA2008 (and outlined at CA10040).

It included changes intended to simplify and reduce the distortive impact of capital allowances, including the introduction of a simplified structure with two general P&M pools, one with the rate of WDAs set at the main 20% rate, and the other with the rate set at the ‘special rate’ of 10%. The rates of the main pool and special rate pool are reduced to 18% and 8% respectively from 1 April 2012 (CT) and 6 April 2012 (IT).

Against this background, the new classification of ‘integral features’ was intended to re-draw the boundary between buildings, including their main features, and other equipment, so that the main features that are normally integral to a modern building (such as electrical, cold and hot water systems etc.) would attract WDAs at the lower rate. This rate was considered to be more appropriate, given the longer average economic life of the defined assets, compared with the generality of other P&M.

Following a period of public consultation, a simple list approach was taken to defining the new classification (rather than, for example, an approach that might have tried to import some sort of ‘purposive’ or ‘trade-specific’ element into the definition). The simple list approach was preferred because this was considered likely to provide a more certain, consistent and fairer set of rules when applied to expenditure by all businesses.