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bigduckontax
bigduckontax, Accountant
Category: Tax
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Experience:  FCCA FCMA CGMA ACIS
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Capital allowances for solar renewable obligation but not just

Customer Question

Capital allowances for solar renewable obligation but not just solar panels
Submitted: 3 years ago.
Category: Tax
Expert:  bigduckontax replied 3 years ago.
Hello, I'm Keith and happy to help you with your question.

Please advise in what capacity you ask this question. Are you a tenant or do you own the property in question and use it for business purposes?
Customer: replied 3 years ago.

A company that I have dealing with asked if I would be able to assist them. It is an investment company that has interest in a ground base solar generation plant. Small scale. Would the company be able to get capital allowance on the investment made?

Expert:  bigduckontax replied 3 years ago.
This would appear to be part of the very wide ranging definition of plant and machinery. HMRC guidelines are:

Qualifying rules for plant and machinery allowances

To qualify for plant and machinery allowances, all the following must apply:

You must have incurred capital expenditure on the provision of plant and machinery that is used wholly or partly for the purposes of your business. You must own the asset in question as a result of incurring that expenditure

The asset must not be something you buy and sell by way of your trade, although you might eventually sell it for some other reason - you may then have to make an adjustment to your capital allowances. The asset must also not get used up in producing what you sell or supply by way of your trade

The asset must generally be expected to last for more than two years
In most cases, you cannot claim capital allowances for assets you lease from someone else. You may be able to claim certain capital allowances for assets that you own and lease out to other users as part of your business, but only in very particular circumstances.
If you partly use an asset for non-business use, for example, for private use - you can still claim capital allowances on the business use of the asset. The allowances you claim must be reduced by the amount arising out of your non-business use so that only the business use proportion is taken into account.

I am of the opinion that the purchase of solar panels for the business would attract capital allowances.

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