Capital allowances may be claimed for tax deductions on most assets purchased for use in the business, ranging from plant and machinery and research and development costs to expenses for building renovations. The classification of these assets determines which of the three types of allowance can be claimed against taxable income. The Annual Investment Allowance allows businesses to deduct in the first year the full value of most items used solely for business purposes, up to the £1 million annual limit (temporarily increased until Dec. 31, 2020). Most plant and machinery can be claimed under the AIA except cars, gifts to the business, and any items purchased before they were used in the company. First-Year Allowance is an enhanced rate available on energy- or water-efficient equipment, which includes certain types of new cars with low CO2 emissions, energy- and water-saving equipment, and new zero-emissions goods vehicles not included in AIA. A Writing Down Allowance is spread out over a number of years and can also be used for assets that are not eligible for the other deductions, including cars, items received as gifts, or items that were owned prior to their use in business. Most items qualify for an 18% annual deduction of their value. Assets that are only eligible for an 6% deduction include integral features of buildings such as escalators or air conditioning, items with a long life (25 years or more), thermal insulation of buildings, or cars with higher CO2 emissions.