1.11 Rate of Structures and Buildings Allowance

As announced in Budget 2020, an increase to the annual rate of the Structures and Buildings Allowance (SBA) will be introduced in Finance Bill 2020. The annual rate will increase from 2% to 3% from 1 April 2020 for corporation tax purposes and 6 April 2020 for income tax purposes. Some miscellaneous amendments to the SBA legislation in Part 2 of the Capital Allowances Act 2001 will also be included in Finance Bill 2020.

2.14 Extending Enhanced Capital Allowances in Enterprise Zones (EZs)

Secondary legislation will be introduced to ensure that 100 per cent First Year Allowances (FYA) remain available for expenditure incurred in relation to all designated areas, whenever designated, until at least 31 March 2021. First Year Allowances are available to companies investing in qualifying plant and machinery for use in designated areas within EZs. These changes will have effect from 1 April 2020.

2.15 Capital allowances: carbon dioxide emission thresholds for business cars and FYAs for business cars, zero emission goods vehicles and equipment for gas refuelling stations

As announced at Budget 2020, statutory legislation will be made and laid in 2020 to 2021 to adjust the CO2 emission thresholds for capital allowances for business cars. The upper threshold for the main writing down allowance rate will be reduced to 50 grams per kilometre (g/km), while the 100 percent FYA for business cars will be extended, with the threshold reduced to 0g/km. The existing FYAs for zeroemission good vehicles and equipment for gas refuelling stations will be extended to the end of 2024 to 2025. 

The changes support the government’s policy to incentivise the uptake of zero-emission vehicles, alongside consulting on bringing forward the phase out date for the sale of new diesel and petrol cars and vans from 2040 to 2035, or earlier if a faster transition is feasible, and the wider policy on climate change to reduce all greenhouse gas emissions from the UK to net zero by 2050.