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OTS report on capital allowances

01 August 2018 / Marian Drew , Paul Morton
Issue: 4658 / Categories: Comment & Analysis , Capital allowances

Improve the regime


  • The OTS report on capital allowances concluded that these should not be replaced by depreciation.
  • Almost nine million businesses spend nothing on assets qualifying for capital allowances.
  • The current system needs reform but must be considered in the context of the wider tax regime.
  • Perhaps depreciation is the way ahead for micro companies.

In June the Office of Tax Simplification (OTS) published Accounting Depreciation or Capital Allowances?. which concluded that the former should not replace the latter.

Some will regard that as an entirely predictable outcome and ask ’What was the point?’. Yet the question had to be addressed – again – and it will continue to be asked even though depreciation has been rejected for now.


Why do this again?

In July 2017 the OTS published...

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