100% deduction for green lorries and vans (not red lorries, yellow lorries!)

A 100% first year allowance is being introduced from April 2010 over a five-year period for business expenditure on zero-emission goods vehicles. This relief was previously announced in the Pre-Budget Report, but was subject to compliance with the European Commission State aid rules.

Baker Tilly analysis

This relief further extends the ‘Green’ 100% capital allowances already available, including those on electric and low-emission cars and specific energy-saving plant and machinery. The intention of this new relief is to encourage businesses to invest in zero-emission goods vehicles.

In detail

The relief is only available for expenditure in a five-year period for companies (from 1 April 2010 to 31 March 2015) and unincorporated businesses (from 6 April 2010 to 5 April 2015). The relief is subject to a €85 million cap per undertaking, but this will not be an issue for the majority of businesses.

The expenditure must be on new and unused vehicles.

There are some restrictions, which will prevent some business from qualifying for the relief. These include businesses that are in financial difficulties under EC guidelines and specialist industries, such as fisheries, aquaculture and waste management.

There will also be exclusion for expenditure on assets for leasing.