Mixed Budget bag for technology

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Chancellor Gordon Brown introduced a new 50% capital allowance rate for small companies investing in plant and machinery, but has not extended the popular 100% first-year allowance on technology purchases.

Innovation and technology have long proved to be popular buzz-words in Brown's Budget lexicon, and despite the loss of the technology-specific allowance, 2004 was no exception.

He used the opportunity to remind companies of the new guidelines for R&D tax credits set out in his December pre-Budget report. And if the IT industry was saddened by the loss of the 100% capital allowance, it might be soothed by the estimated 6bn the government plans to spend on its own administrative syste...

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By afairpo
17th Mar 2004 17:25

Loss of 100% FYA - another anti-avoidance measure?
The loss of the 100% FYA on computers/telecoms may be an extension of the various anti-avoidance measures that have come up in this Budget and earlier - at least one scheme taking advantage of this allowance has been marketed.

That scheme used features similar to film financing partnership - and so was wiped out with the changes to partnership announced last month. It may also have been the decisive factor in ensuring that the allowance was not renewed, so that it could not be exploited in another scheme.

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