This lets taxpayers deduct 50% of the cost of other plant and machinery, known as special rate assets, from their profits during the year of purchase. This includes long life assets such as solar panels and thermal insulation on buildings.
The 50% FYA was introduced alongside the super-deduction and was due to end on 31 March 2023. We are extending it by three years to 31 March 2026. For each year following the first year, 6% of the remaining cost will be written off via Writing Down Allowances (WDAs).
50% FYA allows for faster relief than under the default WDAs-only regime, which is worth 6% each year, including year one.
As part of his commitment to maintain a stable economy, the Chancellor’s long-term ambition is to make 50% FYA permanent.