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HMRC internal manual

Capital Allowances Manual

Plant and Machinery Allowance (PMA): First Year Allowance (FYA): expenditure on North Sea oil ring-fence plant and machinery

CAA01/S45F, FA08/S102

Capital expenditure qualifies for FYAs if it is incurred by a company wholly for the purpose of a trade of extraction of oil or gas in the UK or UK Continental Shelf (a ‘ring-fence’ trade) which is subject to the supplementary charge for ring fence trades. The rate of FYA is now 100% on all expenditure. But between 17 April 2002 and 31 March 2008 expenditure on long-life assets used for the ring-fence trade qualified for 24% FYAs. This was changed by FA08 and now both general and long-life asset expenditure qualifies for 100% FYAs.

There are also special 100% FYAs for mineral extraction under the code for Mineral Extraction Allowances (CA50000)