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April deadline for capital allowance claims

Dealers have until April 2008 to submit new capital allowance claims on any current and past expenditure on acquisitions, new builds or refurbishments.

After that date a new system will be introduced which will include a revised category of equipment as background plant. This will be written down at a rate of 10% a year.

Claims will need to be separated into background plant and trade-related plant, said Spofforths Chartered Accountants.

Although the exact definitions have yet to be announced, Spofforths believes all basic plant in a building will be covered, such as heating and air-conditioning, hot water installations, sanitary appliances, kitchen facilities, window blinds, fire alarms and sprinklers, intruder alarms and lifts.

Until the new rules are introduced, companies which have not carried out a breakdown analysis will be able to submit claims on the current single pool basis, with no separation of background plant.

From April 2008, dealers will be able to set the first £50,000 spent on equipment off against the profits for that year. If a business spends more than £50,000 in one year the excess can be written off against profits at a rate of 20% per year.

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