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HMRC internal manual

Capital Allowances Manual

HM Revenue & Customs
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Plant and Machinery Allowance (PMA): First Year Allowance (FYA): expenditure incurred by SMEs for Northern Ireland purposes

CAA01/S40 - S43

Capital expenditure qualifies for FYA at the 100% rate if it is incurred on or before 11 May 2002 by a SME on the provision of plant or machinery for use primarily in Northern Ireland.

This legislation is intended to give 100% FYA on assets used in Northern Ireland by a business based in Northern Ireland. You may have a case where a business based in Northern Ireland carries out most of its business in Eire. You should treat an asset acquired by such a business as provided for use primarily in Northern Ireland if the use in Eire is ancillary to the use in Northern Ireland.

The normal exclusions CA23110 apply. In addition long life assets, aircraft and hovercraft are excluded from this 100% FYA.

100% FYA is not available on expenditure incurred on the provision of a goods vehicle for the purposes of a qualifying activity that consists primarily of the conveyance of goods. You should note that

  • not all assets used by a business which transports goods are excluded from 100% FYA, only those used in the actual transportation process. The sorts of assets that are excluded are assets like lorries and removal vans used by a transport business. A word processor used in the office of a transport business can qualify for 100% FYA because it is not a goods vehicle.
  • not all goods vehicles are excluded, only those used in a transportation business. A goods vehicle used for the purposes of a qualifying activity other than the conveyance of goods is not excluded from 100% FYA. For example, a department store’s delivery vans are not excluded because the department store’s qualifying activity does not consist primarily of the conveyance of goods.
  • only assets used for the transportation of goods are excluded; assets used for the transportation of passengers are not.

Expenditure on the provision of an asset for use primarily:

  • in agriculture or the fishing sector including fish farming, or
  • in the processing or marketing of agricultural and fish products.


is excluded from 100% FYA unless it is authorised by the Department of Agriculture for Northern Ireland (DANI). The authorisation can be either general or special.

A general authorisation will be published by DANI and will be accompanied by guidelines which will let the taxpayer work out whether expenditure qualifies for 100% FYA. A special authorisation will be given by letter from DANI.

100% FYA is not due if part of the intended use of the asset is outside Northern Ireland and the obtaining of FYA is the main benefit, or one of the main benefits, which could reasonably be expected to arise from the incurring of the expenditure on the asset or any scheme or arrangements of which the incurring of the expenditure forms part.

100% FYA is withdrawn if within two years of the expenditure being incurred the asset begins to be:

  • used primarily outside Northern Ireland, or
  • held other than for use primarily in Northern Ireland.


unless the change is caused by a disposal of the asset to an unconnected person. Where the expenditure incurred on the asset was more than £3.5 million this 2-year clawback period is extended to 5 years.