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HMRC internal manual

Capital Allowances Manual

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HM Revenue & Customs
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Plant and Machinery Allowance (PMA): First Year Allowance (FYA): expenditure on zero emission goods vehicles: exclusions

CAA01/S45DB

Which expenditure is excluded from the relief?

Expenditure is excluded from the relief if:

  • at the time the claim is made the person incurring the expenditure is, or forms part of, an undertaking which

    • it is reasonable to assume would be regarded as a firm in difficulty for the purposes of the Community Guidelines on State Aid for Rescuing and Restructuring Firms in Difficulty, and/or
    • subject to an outstanding recovery order made under of Article 108(23) of the Treaty on the Functioning of the European Union;

      • it is incurred for the purpose of a qualifying activity

        • in the fisheries or aquaculture sector; or
        • related to managing the waste of other undertakings.

        See also CA23147 for further exclusions.

        What is an undertaking in difficulty?

        An undertaking is ‘in difficulty’ if it is reasonable to assume that it would be regarded as a firm in difficulty for the purposes of the Community Guidelines on State Aid for Rescuing and Restructuring Firms in Difficulty (2004/C 244/02), i.e. ‘it is unable, whether through its own resources or with the funds it is able to obtain from its owner/shareholders or creditors, to stem losses which, without outside intervention by the public authorities, will almost certainly condemn it to going out of business in the short or medium term.’ We consider an undertaking to be in difficulty if its latest accounts are not produced on a going concern basis.

        What is a recovery order?

        A recovery order applies to undertakings that are in receipt of State aid that has been declared illegal by the Commission and are subject to an outstanding recovery action, ie they still need to repay the illegal aid.

        What are fisheries and aquaculture?

        The definition of fisheries and aquaculture can be found at Council Regulation (EC) No104/2000. Broadly, it applies to fishermen and businesses engaged in the fish processing industry.

        What is meant by managing the waste of other undertakings?

        ‘Waste’ is defined by Directive 2006/12/EC.
        Undertakings that collect, transport, recover and dispose of waste, including the supervision of such operations and aftercare of disposal sites of other undertakings, is included in the restriction.

        Businesses purchasing qualifying vehicles to collect and dispose of their own waste are unaffected.