285C Acceleration of wear and tear allowances for gas vehicles and refuelling equipment

Summary

This section provides for an accelerated wear and tear allowance of 100% in respect of capital expenditure incurred by persons on new gas vehicles and new refuelling equipment used for the purposes of carrying on a trade. This incentive runs from 1 January 2019 until 31 December 2021. Only expenditure incurred during this period can qualify for the 100% wear and tear allowance. Private passenger motor cars are excluded from the incentive. However, capital expenditure incurred on taxis and passenger motor cars for short term hire to the members of the public may qualify for the accelerated allowance.

Details

Definitions

(1) “biogas” is defined as gas produced from biomass.

“biomass” is defined as the biodegradable fraction of products, waste and residues from agriculture, forestry and related industries and industrial and municipal waste.

“CN code” means a Community subdivision to the combined nomenclature of the European Communities referred to in Article 1 of the Council Regulation (EEC) No. 2658/87 of 23 July 1987 as amended by Commission Regulation (EC) No. 2031/2001 of 6 August 2001.

“compressed natural gas” is defined as petroleum gases and other gaseous hydrocarbons in gaseous state falling within CN code 2711 21 00.

“gas refuelling station” is defined as a premises, or part of a premises, at which gaseous fuel is supplied to a gas vehicle.

“gas vehicle” is defined as a mechanically propelled road vehicle in the engine of which gaseous fuel is used for combustion.

“gaseous fuel” is defined as compressed natural gas, liquefied natural gas or biogas.

“liquefied natural gas” is defined as petroleum gases and other gaseous hydrocarbons in liquefied state falling within CN code 2711 11 00.

“qualifying expenditure” is defined as capital expenditure incurred during the relevant period on the provision of qualifying refuelling equipment or qualifying vehicles.

“qualifying refuelling equipment” is defined as refuelling equipment, which is unused and not second-hand, installed at a gas refuelling station.

“qualifying vehicle” means a gas vehicle which is unused and not second-hand, is constructed or adapted for the conveyance of goods or burden of any description, the haulage by road of other vehicles or the carriage of passengers. Private passenger motor cars cannot qualify for the accelerated wear and tear allowance under this section. Such vehicles are subject to the CO2 emissions regime in Part 11C. Vehicles used for the purpose of hire to, or the carriage of, members of the public in the ordinary course of a trade (e.g. taxis) may qualify.

“refuelling equipment” is defined as a storage tank for gaseous fuel, a compressor, pump, control or meter used for the purposes of refuelling gas vehicles, or equipment for supplying gaseous fuel to the fuel tank of a gas vehicle.

“relevant period” is defined as the period commencing on or after 1 January 2019 and ending on 31 December 2021.

Wear and tear allowances

(2) This subsection applies the provisions of Chapter 2 of Part 9 so that when a “wear and tear” allowance is made under section 284 to a person in respect of capital expenditure incurred during the relevant period on a qualifying vehicle or qualifying refuelling equipment (as defined), the rate of allowance will be 100%. [Section 284 is the basic wear and tear allowances section for plant and machinery. Section 284(2)(ad) provides that, for capital expenditure incurred after 4 December 2002, the rate is 12.5%]. Subsection (2) of section 285C increases this rate to 100%.

(3) This subsection ensures that if relief is claimed on capital expenditure under either section 285A (acceleration of wear and tear allowances for certain energy efficient equipment) or 286 (increased wear and tear allowances for taxis and cars for short term hire) the same expenditure cannot qualify for the accelerated wear and tear allowance under section 285C.

Relevant Date: Finance Act 2019