2024 Capital Allowances for Fuel Storage Tanks
When purchasing items categorised as 'plant and machinery,' including fuel storage tanks, companies in the UK can claim capital allowances, effectively reducing their taxable profits.
Key Points Regarding Capital Allowances for Fuel Storage Tanks & Gas Refuelling Equipment
What Are Capital Allowances?
Capital allowances are deductions that businesses can claim on certain capital expenditure, reducing their taxable profits. They apply to a variety of items, including equipment, machinery, and business vehicles.
Fuel Storage Tanks as Plant and Machinery:
Fuel storage tanks fall under the 'plant and machinery' category. Therefore, businesses purchasing these tanks are eligible to claim capital allowances, offering significant tax relief.
Three Types of Capital Allowances:
Annual Investment Allowance (AIA): Businesses can claim up to £1 million on qualifying plant and machinery.
First Year Allowances: This allows for claiming the full cost of certain items in the year of purchase.
Writing Down Allowances: Applicable when assets don’t qualify for AIA or the AIA maximum has been reached.
100% First Year Allowances (enhanced capital allowances):
Eligible Items: New and unused plant and machinery including plant and machinery for gas refuelling stations, for example storage tanks and pumps & gas, biogas and hydrogen refuelling equipment are eligible for 100% first year allowances.
Claim Process: Businesses can claim these allowances on their tax return. If not claimed fully, the remainder can be claimed as writing down allowances.
Important Considerations:
100% first year allowances can be claimed in addition to the AIA but not on the same expenditure.
Restrictions apply to items bought for leasing or use in a rented home.
Improving Profitability:
Capital allowances provide a significant opportunity for businesses in the fuel industry and organisations that store fuel, particularly when investing in assets like fuel storage tanks. By understanding and utilising these allowances, businesses can significantly reduce their tax liabilities, improving overall profitability.
For detailed guidelines and to explore how capital allowances can benefit your fuel storage investments, visit Gov.uk Capital Allowances and Gov.uk First Year Allowances. To enquire about fuel storage solutions that qualify for these allowances, get in touch with OTS Group.
