While business rates discounts will provide a key incentive at the majority of Enterprise Area sites, at some locations Enhanced Capital Allowances may be more attractive. Enhanced Capital Allowances (also known as First Year Allowances) can enable a business to claim for up to 100 per cent of the cost of certain qualifying investment in plant and machinery against the businesses taxable profits.
Where a single user, or small number of businesses, are likely to incur significant capital expenditure costs, Enhanced Capital Allowances may be more attractive, and worth more to firms, than business rates discounts.
Providing Enhanced Capital Allowances is a tax power currently reserved to the UK Government which made it clear that the scope to offer these allowances in Scotland and across the UK would be limited strictly to a small number of sites. The Scottish Government made a case to the UK Government for Enhanced Capital Allowances to be available at three locations in Scotland. These were sites where the likely scale of business investment in plant and machinery was likely to make the enhanced allowances potentially attractive.
In his 2012 Budget speech the Chancellor of the Exchequer, George Osborne MP, accepted the case put forward by the Scottish Government and confirmed Enhanced Capital Allowances will be available to investors in Dundee, Nigg and parts of Irvine.
The UK Finance (No. 4) Bill 2010-12 includes the clauses which will provide the legal basis for offering Enhanced Capital Allowances within the three Enterprise Area sites in Scotland as well as within specific enterprise zones in England and Wales. The Bill is not expected to receive Royal Assent and become law before this summer. However, the draft Bill includes a retrospective clause which will enable businesses to claim the enhanced allowances for any relevant expenditure incurred between April 2012 and March 2017.
As Enhanced Capital Allowances will be enabled by an Act of the UK Parliament they will be administered and delivered in a consistent manner across the UK in Scotland, England and Wales.
You will find below maps indicating the Enterprise Area boundaries for sites which will offer Enhanced Capital Allowances;
Dundee Port (Dundee City)
Dundee Claverhouse (Dundee City)
Irvine (N. Ayrshire)
At Dundee the Enterprise Area site will comprise two individual locations – waterfront land at Dundee Port supported by a site two miles inland at Claverhouse East. The Claverhouse East site will provide a satellite location for the manufacture of renewable energy components to complement activity at the Port.
Irvine is the only location where part of the site will offer Enhanced Capital Allowances and part of the site will offer business rates discounts. This reflects the type of businesses and anticipated scale of investment at the different sections of the Irvine site. The map above indicates both the sections of the site which will offer Enhanced Capital Allowances and the sections which will offer business rates discounts.
 Until the UK Finance (No 4) Bill receives Royal Assent and becomes law the maps cannot be confirmed as final drafts.