If a company's current policy of simply allocating any qualifying expenditure to the main pool or the special rate pool. Explain how the other types of capital allowace might be used to achieve a more tax efficient solution.
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Capital Allowances
It is not a question of a company's policy - qualifying expenditure on plant and machinery will either qualify as main pool expenditure or special rate pool expenditure!
The only decisions to be made by the taxpayer are;
- to allocate AIA firstly to special rate pool expenditure, and
- if dealing with an unincorporated trader, to limit the CA claim so as not to waste the PA
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