301 Application to professions, employments and offices

Capital allowances are also available in respect of capital expenditure incurred on the provision of machinery or plant for the purposes of a profession. The allowances apply in the same manner as they apply in relation to trades. Thus, initial allowances (if available) and wear and tear allowances (including free depreciation if available) apply in respect of capital expenditure incurred on the provision of machinery or plant for the purposes of a profession, and balancing allowances and charges also apply in relation to such expenditure. However, section 286 (increased wear and tear allowances for taxis and cars for short-term hire) does not apply to professions – it is clearly confined to traders as the operation of a taxi service or a car hire business are trading activities.

Capital allowances are also available in respect of capital expenditure incurred on the provision of machinery or plant for the purposes of an office or employment. The allowances apply in the same manner as they apply in relation to trades except that no initial allowance (section 283) or free depreciation (section 285) is available. Thus, wear and tear allowances, balancing allowances and balancing charges apply in respect of capital expenditure incurred on the provision of machinery or plant for the purposes of an office or employment. Section 286 (increased wear and tear allowances for taxis and cars for short-term hire) does not apply in the case of an office or employment – it is clearly confined to traders as the operation of a taxi service or a car hire business are trading activities.

Relevant Date: Finance Act 2021