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Costing for maximum profit
Page 55
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On October 27 1970 the Chancellor of the Exchequer announced certain changes in capital allowances and depreciation, and which are as follows: 1. Initial allowances granted in the first year of the purchase of plant, including commercial vehicles, will be abolished forthwith.
2. In place thereof there is to be a "new" allowance of 60 per cent of the purchase price of plant /commercial vehicles which can be claimed against Income Tax and/or Corporation Tax in the first year in which the capital expenditure is incurred This figure will also include the 25 per cent annual depreciation allowance.
3. Thereafter the plant !commercial vehicles will receive the same annual allowance as hitherto, ie 25 per cent on the written down balance at the end of each year.
4. The allowances apply to both new and secondhand plant /commercial vehicles.
In the light of these changes the Inland Revenue tables included in pages 15 and 16 of CM's book Costing for Maximum Profit should be adjusted accordingly.