ICAEW.com works better with JavaScript enabled.


Chancellor confirms full expensing will be permanent


Published: 22 Nov 2023 Update History

The full expensing regime will not expire on 31 March 2026 and will be made permanent, the Chancellor announced at the Autumn Statement on 22 November 2023.

The full expensing regime allows companies to claim 100% capital allowances for expenditure on qualifying plant and machinery. This means that companies paying the main rate of corporation tax obtain tax relief of 25p for every £1 of qualifying expenditure.

Full expensing operates alongside a 50% first-year allowance for expenditure by companies on new special rate assets (such as integral features, long-life assets, etc) that was also due to expire on 31 March 2026. The first-year allowance will also become permanent.

ICAEW welcomes this announcement. Making these reliefs permanent will provide much-needed certainty to companies, a point that ICAEW called for in its representation to HM Treasury ahead of the Autumn Statement.

Expenditure on plant and machinery for leasing remains excluded from full expensing. The government will continue to explore potential solutions for the leasing sector.

However, the underlying rules for capital allowances could also benefit from a review. The recent Upper Tribunal decision in Gunfleet Sands Limited & Others v HMRC highlights the potential for the tax system to provide no tax relief for business expenditure. In that case, the Tribunal decided various environmental impact and technical/engineering studies performed as part of the process of establishing new windfarms was not qualifying expenditure “on the provision of plant or machinery”. Yet, as the expenditure was not revenue in nature, it did not qualify for a tax deduction on that basis either. 

The government will launch a technical consultation on wider changes to the capital allowances regime after the Autumn Statement. Hopefully the consultation will address anomalies such as these, although the consultation is not intended to extend the scope of expenditure that is eligible for capital allowances.

More reading:

Autumn Statement

On 22 November 2023, Chancellor Jeremy Hunt delivered the Autumn Statement. Read ICAEW's analysis and reaction.

Big Ben
The Tax Faculty

ICAEW's Tax Faculty is recognised internationally as a leading authority and source of expertise on taxation. The faculty is the voice of tax for ICAEW, responsible for all submissions to the tax authorities. Join the Faculty for expert guidance and support enabling you to provide the best advice on tax to your clients or business.

More support on tax

ICAEW's Tax Faculty provides technical guidance and practical support on tax practice and policy. You can sign up to the Tax Faculty's free enewsletter (TAXwire) which provides weekly updates on developments in tax.

Sign up for TAXwireJoin the Tax Faculty

More from the Tax Faculty

Latest news
Making tax digital image

Stay up to date with the latest developments in tax by signing up to the Tax Faculty's weekly e-newsletter

Practical guidance

Comprehensive support for Tax practitioners each month from the Tax Faculty and expert contributors.

Technical support
Tax Faculty image

Expert advice from the Tax Faculty's technical managers on all the developments in tax policy and practice.