Capital allowances loophole ended

The Government has bought forward the closure of a loophole which previously had allowed businesses to accelerate capital allowances claims for plant and machinery and thereby obtain advantageous early tax relief.

The Government has bought forward the closure of a loophole which previously had allowed businesses to accelerate capital allowances claims for plant and machinery and thereby obtain advantageous early tax relief.

The change was brought into effect immediately even though it was originally proposed for April 2012. Legislation to give the change legal backing will be introduced in the 2012 Finance Bill.

The Government was concerned about the loss of significant revenue to the Exchequer. Even so, it seems a little underhand to bring a change forward in advance of the legislation that permits it.

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