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New Changes - Budget 2021 (3rd March)

The Budget on the 3rd March 2021 included a number of important changes to the capital allowances regime.

Summary of main changes

1. Main Pool

  • Super-deduction (from 1st April 2021 until 31st March 2023)
  • Rate increased from 18% to 130%
  • Only available to Companies (not LLP's or Individuals)
  • Originally not available to property companies (Leasing exclusion) - This exclusion was later repealed to allow property companies to benefit
  • For new Capex only - contracts entered into on/after the 3rd March 2021
  • Clawback rules apply through balancing charges on disposals within certain time frame
  • No upper Cap

2. Special Rate Pool

  • First-year allowance (from 1st April 2021 until 31st March 2023)
  • Rate increased from 6% to 50%
  • Only available to Companies (not LLP's or Individuals)
  • Not available to property companies (Leasing exclusion) - This exclusion was later repealed to allow property companies to benefit
  • For new Capex only - contracts entered into on/after the 3rd March 2021
  • Clawback rules apply through balancing charges on disposals within certain time frame
  • No upper Cap


3. New Freeports

  • 8 English sites include; East Midlands Airport, Felixstowe & Harwich, Humber Region, Plymouth, Solent, Liverpool City Region, Teesside and Thames
  • Structures and Buildings Allowances (SBA's) - rate increased from 3% to 10% if first used before the 30th September 2026
  • Enhanced Capital Allowances (ECA's) - 100% first year allowances for plant and machinery expenditure incurred before the 30th September 2026


4. Annual Investment Allowance (AIA) - £1m extension until the 31st December 2021 (as previously announced), reducing to £200,000 after the 1st January 2022.


5. Extended loss carry back for businesses - temporary extension from one to three years, capped at £2m in years 2 and 3

We await further detailed guidance to be published by HMRC in the coming months.

Our services

Preparation of capital allowances reports
We prepare fully disclosed capital allowances reports for both property acquisitions and enhancement projects.
Strategic advice
We provide strategic advice throughout the property cycle including s198 elections, contributions and land remediation relief.
Due diligence
We liaise with the client and their advisors to ensure that the capital allowances position is protected during the acquisition, disposal and leasing of property.
Initial reviews
We offer a free initial review to establish if a capital allowances opportunity exists. This review is carried out with minimal time and disruption to the client.
Negotiation with the tax authorities
We apply an enquiry mitigation strategy to all of our client work. Our experience and extensive knowledge of tax legislation and case law enables us to assist with potential HMRC enquiries.

What our clients say

David and the team are very efficient, proactive and always available to assist
Ines Ramirez, Finance Director, Pontegadea
Any apprehension of switching business to Colne were quickly put aside with David's personal and fresh approach to the world of capital allowances.
Hitesh Patel, Group Financial Controller, Barwood Capital
"Colne Capital Allowances provided us with a professional strategic approach"
Paul Crosbie, Fund Manager, M&G
'They consistently deliver a high quality service combined with a personable and professional approach'
Chris Warren, Managing Director - Fund Services, Patrizia
I have always been impressed by their attention to detail, understanding of complex tax legislation and willingness to help
William Munden, Head of Finance, LBS Properties
Their client service is exceptional, always very reactive and responsive
James Deane, Finance Director, Chancerygate
David and his team are efficient and highly responsive
Martin Bramhill, Group Tax Manager, Helical
David has enabled clients to claim all capital allowances they are due
Andrew Noton, Partner - Lubbock Fine
they continue to impress with their professionalism, expertise and timeliness
Michael Hughes, Managing Director - Whirledge & Nott
"The process was seamless and the results outstanding."
David Butcher, Upham Pub Group
"We find their charges very acceptable, and the success rate on our cases has been 100%"
Martin Waller, Investra Capital & Pelham Associates
The relationship gives me peace of mind, support in abundance and a 'can do' attitude
Gill Kreft, Pendine Park Care Organisation

Expert industry insight

Budget 2021 (27th October)Annual Investment Allowance (AIA) – Extension of £1m AIA- 31st March 2023
Is 2021/2022 the best time to carry out qualifying expenditure
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Super-deduction Good News!
Potential good news for Landlords as leasing restriction may be amended.
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New Changes - Budget 2021 (3rd March)
Exciting new changes to the capital allowances regime
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Get in touch

If you would like to discuss our services in more detail or would be interested in a free initial review please contact us
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