The short version: Capital allowances let you claim tax relief on things you buy for your business. Equipment, vehicles, computers, machinery. HMRC treats them as a business expense, which means less tax to pay.
If you’re self employed or run a limited company, you can claim capital allowances on assets you actually own. Hired or leased something? That doesn’t count. You need to own it outright.
What can you claim on?
The most common things include company vehicles (cars and vans), computers and office equipment, tools and specialist machinery, and renovating business premises like an office or shop. R&D costs can qualify too.
How does it work?
There’s something called the Annual Investment Allowance (AIA) which lets you deduct the full cost of most equipment from your profits before tax. There are limits that change from time to time, so check gov.uk for the current threshold.
If you’ve used up your AIA or the item doesn’t qualify (like cars), you use a writing down allowance instead. That lets you deduct a percentage of the value each year.
Bought something for the business and not sure how to claim it? Get in touch and we’ll make sure you’re claiming properly.
