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HMRC internal manual

Capital Allowances Manual

Plant and Machinery Allowance (PMA): First Year Allowance (FYA): expenditure incurred by SMEs

CAA01/S44; FA04/S142; FA06/S30; FA07/S36

Capital expenditure incurred by a small or medium size enterprise (SME) normally qualifies for FYA at the 40% rate. There is an exception to this. Expenditure incurred by a small enterprise in:

  • the years ended 31 March 2005, 31 March 2007 and 31 March 2008 (Corporation Tax),
  • the years ended 5 April 2005, 5 April 2007 and 5 April 2008 (Income Tax),


qualifies for FYA at the 50% rate.

The normal exclusions CA23110 apply. In addition, long life asset expenditure CA23720 does not qualify for this 40% FYA.