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Depreciation of assets in business accounts is not an allowable deduction for tax purposes. However Capital Allowances are available instead and these are subject to their own, often frequently changing rules at the hands of the Government of the time. Manipulating Capital Allowance rules gives a Government ways in which to encourage investment and target particular aspects of business by offering incentives such as tax relief on certain environmentally-friendly capital expenditure. |
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The effect of Capital Allowances in a business Tax Calculation is to reduce the profits which are subject to tax, either Income Tax for individuals and partnerships or Corporation Tax for companies |
Capital Allowances are an entitlement if they qualify under the rules and are a valuable, legitimate way in which to reduce your tax liabilities. It is important that you identify your entitlement and ensure that you claim them in full where it is advantageous for you to do so.
