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HMRC internal manual

Capital Allowances Manual

Plant & Machinery Allowances (PMA): Long-life assets: Airlines agreement - purchases before 1 July 2014

Note: CA23781 and 23782 apply only to aircraft purchased before 1 July 2014. CA23783 applies to aircraft purchased on or after 1 July 2014.


There was an agreement between HMRC and the British Air Transport Association (BATA) on the application of the long-life asset rules to jet aircraft capable of a configuration of 60 or more seats and used primarily for the carriage of passengers or freight for profit (referred to below as “jet aircraft”) which made up the bulk of the aircraft operated by members of BATA. The agreement applied only to expenditure which was incurred on or before 31 December 2013.

Following the expiry of the agreement, the same treatment as detailed in the agreement is acceptable for expenditure incurred between 1 January 2014 and 30 June 2014; if expenditure incurred at this time is treated in accordance with the agreement then you should accept this treatment. 

The main points from the agreement are reproduced below:   

For jet aircraft which came within the arrangement, the total expenditure on the aircraft in its ready-for-service configuration was treated as made up of two equal sums,

  • one of which is long-life and attracts allowances as special rate expenditure,
  • while the other is not long-life and attracts allowances at the normal rate for plant and machinery.

Treat the aircraft as 50% long-life and 50% normal-life assets. Disposal proceeds should be apportioned in the same ratio.

Under the arrangement, the airline also undertook to inform HMRC of the details of any finance lease in respect of jet aircraft entered into up to 31 December 2013 within three months of so doing.

The arrangement was open to lessors so that they too can have certainty in planning their transactions. In the case of finance lessors, an arrangement with an individual company, which does not apply to other members of the leasing group, may be accepted.

The details of the arrangement were contained in the text of formal agreements (one version for airlines, the other for lessors) and an explanatory statement agreed between the LBS offices dealing with the airlines and BATA. Copies of the agreements and explanatory statement are available from:

Business Assets and International (Technical)
Third floor
100 Parliament Street
London SW1A 2BQ