Under the current system, small enterprises (and if you receive our newsletter, thats what yours is) get 50% of the cost of a new item of equipment or a commercial vehicle allowed against profit in the year it was purchased and then 25% of whats left in year 2 and so on.

A new system begins in April 2008, this gives 100% of the cost in year 1, subject to an annual limit of £50,000. (Note the 100% does not apply to cars, although 100% relief can be claimed on certain fuel efficient cars).

This is good news for small business owners.

Balances on capital allowances pools of up to £1,000 can be written off from 1 April 2008, more good news.

Industrial Buildings Allowances are claimed on buildings used for manufacturing. The current allowance of 4% on the qualifying cost of the buildingreduces to 3% in April 2008 then 2% in April 2009 1% in April 2010 and disappears completely from April 2011.