What’s the definition of ‘plant and machinery’? Find out on today’s tax tip.
(3-minute read)
We will cover:
- Some examples of plant and machinery items
- How they relate to claiming business expenses
Plant and machinery definition
Plant and machinery is a broad term that refers to the items you can claim using capital allowances.
They’re existing items within the building that you use to maintain your business and include a broad variety of categories.
Some examples listed by HMRC are:
- Items that you keep to use in your business, including cars
- costs of demolishing plant and machinery
- parts of a building considered integral, known as ‘integral features’
- some fixtures, for example fitted kitchens or bathroom suites
- alterations to a building to install plant and machinery – this does not include repairs
Integral features
Integral features are:
- lifts, escalators and moving walkways
- space and water heating systems
- air-conditioning and air cooling systems
- hot and cold water systems (but not toilet and kitchen facilities)
- electrical systems, including lighting systems
- external solar shading
Fixtures
Fixtures can be:
- fitted kitchens
- bathroom suites
- fire alarm and CCTV systems
In accounting, plant and machinery are assets used by a business for the purpose of running it, but do not include stock in trade, the business premises or part of the business premises.
What’s the difference between plant and machinery?
The difference between plant and machinery is that generally machinery will have moving working parts, and plant will not (though computers and similar electronic devices are considered machinery, despite having no moving parts). The working parts of a machine are also considered to be machinery.
Classification
For the purposes of claiming capital allowances, which are expenditure a company can claim against taxable profit, most tangible capital assets used in the course of a business can be classed as plant and machinery.
Plant and machinery examples
There is no exhaustive list of plant and machinery assets, and whether an item qualifies for capital allowances depends on its use for your business.
Some examples of assets which may qualify for either the super-deduction or the 50% FYA include, but are not limited to:
- Solar panels
- Computer equipment and servers
- Tractors, lorries, vans
- Ladders, drills, cranes
- Office chairs and desks
- Electric vehicle charge points
- Refrigeration units
- Compressors
- Foundry equipment.
As you can see, it’s a wide-ranging classification as this list includes vehicles, miscellaneous equipment and machinery as well as furniture.
Plant and machinery valuation
If you’re running a business that maintains a large fleet of vehicles, equipment, machinery, or tools, it’s important to value your assets.
It’s also important to keep receipts of any expenditure to claim back the costs.
We have posted a series of articles to better inform you of the benefits of claiming capital allowances and the types of reliefs available:
Speak to us and we will help you get the best savings. Don’t miss out on this valuable tax-saving tip!
Contact us today at 01772 788200 to find out more about how we can help, or WhatsApp us out-of-hours at 07787 010190.
Sending an e-mail is simple too, just fill out this short form and we’ll get back to you!
Kind regards Ilyas