Budget short-term asset life change is good news for machine tool buyers
1 min read
The recent Budget announcement of increase in the short-term asset life, from four to eight years, which comes into effect next month, will positively affect machine tool purchases.
According to the Manufacturing Technologies Association (MTA), which represents suppliers of machine tools and other manufacturing technology, the cost to the Exchequer is being put at £170 million, but the benefit to industry is still being calculated.
An MTA spokesman said that the move was "definitely welcomed" and that it is "significant".
Machinery understands that companies will be able to nominate a machine tool as a short life asset, one that will be disposed of after eight years, at the end of the tax year. This means a machine tool could effectively be in a plant for up to nine years, prior to its disposal.
At time of disposal, after having claimed the annual allowance - currently 20% but falling to 18% in 2012 - the company can claim a balancing allowance for the cost of the machine tool less any monies gained on sale of the asset, the MTA says.
