As a parting gesture, Gordon Brown announced a major overhaul of tax allowances for business investment in plant, machinery and buildings.
In his budget speech, the chancellor said he would expand on the scope of first year allowances for environmental equipment. The detailed budget press notice PN 01 explained that from April 2008 first year allowances on specified plant and equipment will be scrapped and replaced by an Annual Investment Allowance on expenditure up to 50,000.
For the next year the temporary first year allowance of 50% for small businesses investing in plant and machinery introduced last year will remain, and so will the 40% rate for medium-size business.
When they are scrapped, the annual investment allowance will be available to all businesses regardless of their size or le...