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Shipping: Capital Allowances

Question for Treasury

UIN 14166, tabled on 11 June 2021

To ask the Chancellor of the Exchequer, what discussions his Department has had with HMRC on the classification of long- and short-term vessels under the Capital Allowance scheme for commercial maritime vessels.

Answered on

16 June 2021

Treasury officials are in regular contact with HMRC colleagues.

HMRC do not classify which assets should be written down at the main or special rate of writing down allowances. Instead, businesses should identify whether an asset they have acquired has a useful economic life (UEL) of more or less than 25 years when new. This UEL test for plant and machinery should be applied on the asset as a whole, rather than individual components, since for tax purposes the asset is depreciated as a single unit.

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