Incorporated businesses who are eligible will receive significant benefits as a result of being able to claim full expensing. This measure is expected overall to improve business’ experience of dealing with HMRC as it extends the availability of full expensing and 50% first-year allowances on a permanent basis. These figures are set out in Table 5.1 of Autumn Statement 2023 and have been certified by the Office for Budget Responsibility. More details can be found in the policy costings document published alongside Autumn Statement 2023 Economic impact

There is no impact on individuals as this measure only affects companies. This measure is not expected to impact on family formation, stability or breakdown. Equalities impacts It is not expected that there will be adverse effects on any group sharing protected characteristics. Impact on business including civil society organisations The measure is expected to have a negligible impact on the administrative burdens of an estimated 7,000 companies that incur qualifying expenditure on plant and machinery which is not already fully expensed through the annual investment allowance. Continuing costs could include maintaining additional records and calculating the balancing charge on disposal. The costs could increase each year as more assets are disposed but these costs will eventually flatten out. Companies within the charge to corporation tax investing in plant and machinery. General description of the measure

The current law for full expensing is contained within Section 7 Finance (No.2) Act 2023, which treats certain provisions as having been inserted into Part 2 of CAA01. Proposed revisions One-off costs could include familiarisation with the change and updating software to account for the reliefs being made permanent. The current law for capital allowances is contained within Part 2 of the Capital Allowances Act 2001 (CAA01). The rules on first-year allowances are primarily contained within Chapter 4 Part 2 CAA01 and Sections 52-52A CAA01. Chapter 5 contains provisions on pooling, disposal events and disposal values. Chapter 17 contains various anti-avoidance provisions which apply to first-year allowances. This measure will make full expensing — a 100% first-year allowance for main rate expenditure — and the associated 50% first-year allowance for special rate expenditure permanent. Policy objective

Legislation will be introduced in Autumn Finance Bill 2023 to remove the sunset date of 1 April 2026 currently contained in Section 7(3) Finance (No.2) Act 2023. However, there are likely to be continued administrative savings for expenditure on which full expensing is claimed as businesses will no longer be required to maintain pools for such expenditure. At Spring Budget 2023, the government introduced two new temporary first-year allowances. For qualifying expenditure on the provision of plant or machinery incurred on or after 1 April 2023 but before 1 April 2026, companies can claim: Main rate expenditure is qualifying expenditure on plant or machinery that is not special rate. Special rate expenditure is listed in Section 104A CAA01 and includes, but is not limited to, thermal insulation, integral features and long-life asset expenditure.The government also committed to making full expensing permanent when fiscal conditions allowed. This measure makes full expensing permanent. Detailed proposal Operative date