UK: Proposed replacing capital allowances - KPMG Global
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UK: Proposed replacing capital allowances with deduction for accounts depreciation

UK: Proposed replacing capital allowances

Following a recommendation made for simplifying the corporation tax computation, the Office of Tax Simplification (OTS) published a “scoping document” for its anticipated review of capital allowances, as requested by the Chancellor. The document examines replacing capital allowances with accounts depreciation as a means of giving tax relief for investment in tangible assets.


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During the OTS’s corporation tax computation review, capital allowances were consistently highlighted by businesses and tax professionals as an area of high complexity, with uncertainty about identifying qualifying assets and a disproportionate administrative burden in relation to the value of the tax relief claims. Comments were also made that the capital allowances rules did not always align with the commercial reality of the accounts. 


Read a September 2017 report prepared by the KPMG member firm in the UK

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