CA23147 - Plant and Machinery Allowance (PMA): First Year Allowance (FYA): expenditure on zero emission goods vehicles: grants affecting entitlement to allowances

CAA01/S45DB (6) to (10)

Expenditure does not qualify for the relief where it is subsidised by

• a notified State aid, or
• a grant or subsidy which is not a notified State aid but which is declared by Treasury order to be relevant for the purposes of withholding allowances under section 45DA.

A notified State aid is a State aid notified to and approved by the European Commission.

If the grant or payment is made after a claim to FYA been made the allowance is withdrawn to that extent. Any assessments or adjustments needed to withdraw the allowance may be made within 3 years of the end of the chargeable period in which the grant, payment or repayment is made.

If the person receiving the grant or payment repays it wholly or partly the grant or payment is treated as if it had never been made to the extent that it is repaid.

Example

Brian incurs qualifying expenditure of £70,000 purchasing a zero-emission van. However, £5,000 is paid for by a government grant. The grant is a notified State aid. Therefore, only £65,000 of the expenditure will qualify for capital allowances - either a 100% FYA or WDA.