Maximise Tax Relief on Your Capital Investments
Capital allowances can significantly reduce your tax liability by allowing you to write off the cost of certain assets. We help you navigate the complexities to ensure you claim your full entitlement.
What Are Capital Allowances?
Capital allowances are a form of tax relief for businesses. Instead of depreciating capital assets in your accounts, you can deduct a portion of their value from your profits before paying tax. This accelerates tax relief, improves cash flow, and incentivises investment in new equipment and infrastructure.
Types of Capital Allowances
Understanding the different capital allowance schemes available to your business.
Full Expensing
Companies can claim 100% relief on new and unused main rate plant and machinery in the year of purchase, with no spending limit.
Annual Investment Allowance (AIA)
Deduct the full value of qualifying plant and machinery up to £1M per year. Available to most businesses.
First-Year Allowances (FYAs)
Claim 100% relief on specific assets like new zero-emission vehicles and EV charging points in the year of purchase.
Structures & Buildings (SBA)
A straight-line relief of 3% per year on the cost of constructing or acquiring non-residential buildings and structures.
50% First-Year Allowance
Companies can claim a 50% first-year allowance for new special rate assets, such as integral building features.
Writing Down Allowances (WDAs)
For assets not covered by other allowances, claim a percentage (18% main rate, 6% special rate) of their value each year.
Practical Application: A Case Study
A UK manufacturing company invests £750,000 in new production machinery and £300,000 on office equipment.
Total Investment: £1,050,000
Allowance Used: Full Expensing (100%) on machinery, AIA on office equipment.
Total Deduction: £1,050,000 from taxable profits.
Tax Saving: £262,500 (at 25% Corporation Tax)
By strategically using the available allowances, the company achieved a significant tax saving in the first year, directly improving its cash flow for reinvestment.
Key Dates & Deadlines
- Full Expensing: Now permanent for companies.
- Zero-Emission Cars FYA: Ends March/April 2026.
- EV Charging Points FYA: Ends March/April 2026.
- Zero-Emission Goods Vehicles FYA: Ends March/April 2025.
Are You Claiming Your Full Entitlement?
Many businesses miss out on valuable capital allowances. Our specialists can review your fixed asset register to identify all qualifying expenditure and maximise your claim.
Request a Capital Allowances Review