The short version: The Annual Investment Allowance (AIA) lets you deduct the full cost of certain business equipment from your profits in the year you buy it. Less taxable profit means a smaller tax bill.
What can I claim for?
Most equipment you buy for your business qualifies: computers, tools, machinery, office furniture, vans. The big exception is cars. They don’t qualify (though you can claim for them separately through writing down allowances).
How much can I claim?
Up to £1 million a year. Unless you’re running a very large operation, you won’t hit that limit.
Quick example
You’re a self employed designer. You buy a new Mac for £2,000. Your profit for the year is £35,000. You claim AIA on the Mac, so you only pay tax on £33,000. Simple.
Anything else?
You need to claim within four months of buying the item. And it only applies to things you genuinely use for work.
Bought something for the business and not sure if you can claim? Ask us and we’ll let you know.
