• 2025/26
  • 2024/25

  • Capital allowances - plant and machinery

    • The cost of purchasing capital equipment in a business is not a revenue tax deductible expense. However, tax relief is available on certain capital expenditure in the form of capital allowances.
    • Plant and machinery allowances may be available on items such as machines, equipment, furniture, certain fixtures in a building ('integral features'), computers, cars, vans and similar equipment used in a business.
    • There are special rules for cars and certain 'environmentally friendly' equipment.
    • Plant and machinery allowances may be available to owners of commercial property which is let out to a business.
    • The Annual Investment Allowance (AIA) gives a 100% write-off on most types of plant and machinery (but not cars) up to an annual limit.
    • Writing down allowances (WDA) are given for expenditure for which AIA is not, or cannot be, claimed.
    • A Structures and Buildings Allowance of 3% may be available for qualifying investments to construct new, or renovate old, non-residential structures and buildings.

    AIA

    • Special rules apply to accounting periods straddling the dates shown in the tables below.
    • The AIA may need to be shared between certain businesses under common ownership.

    AIA limits - companies

    Annual limit

    £
    1,000,000

    AIA limits - sole traders and partnerships

    Annual limit

    £
    1,000,000

    Other plant and machinery allowances

    • Expenditure upon which AIA is not given/claimed will obtain relief through the 'main rate pool' or the 'special rate pool' rather than each item being dealt with separately.
    • The annual rate of WDA is 18% in the 'main rate pool' and 6% in the 'special rate pool'.
    • A 100% first year allowance (FYA) may be available on certain energy efficient plant and cars.

    Other allowances

    First Year Allowance (FYA) on certain plant, machinery and cars of 0g/km (for cars purchased before 1 April 2026)

    100%

    Corporation tax FYA (‘full expensing’) on certain new, unused plant and machinery 

    100%

    Corporation tax FYA on new, unused long-life assets, integral features of buildings, etc. 

    50%

    Cars

    • For expenditure incurred on cars, costs are generally allocated to one of the two plant and machinery pools.
    • AIA is not available on any car but a 100% first year allowance may be available on certain cars. To qualify for first year allowance, the car must be purchased new.

    Cars acquired from April 2021

    Emissions (g/km)

    Pool

    Allowance

    0 Main rate 100% FYA
    ≤ 50 Main rate 18% WDA
    >50 Special rate 6% WDA

  • Capital allowances - plant and machinery

    • The cost of purchasing capital equipment in a business is not a revenue tax deductible expense. However, tax relief is available on certain capital expenditure in the form of capital allowances.
    • Plant and machinery allowances may be available on items such as machines, equipment, furniture, certain fixtures in a building ('integral features'), computers, cars, vans and similar equipment used in a business.
    • There are special rules for cars and certain 'environmentally friendly' equipment.
    • Plant and machinery allowances may be available to owners of commercial property which is let out to a business.
    • The Annual Investment Allowance (AIA) gives a 100% write-off on most types of plant and machinery (but not cars) up to an annual limit.
    • Writing down allowances (WDA) are given for expenditure for which AIA is not, or cannot be, claimed.
    • A Structures and Buildings Allowance of 3% may be available for qualifying investments to construct new, or renovate old, non-residential structures and buildings.

    AIA

    • Special rules apply to accounting periods straddling the dates shown in the tables below.
    • The AIA may need to be shared between certain businesses under common ownership.

    AIA limits - companies

    Annual limit

    £
    1,000,000

    AIA limits - sole traders and partnerships

    Annual limit

    £
    1,000,000

    Other plant and machinery allowances

    • Expenditure upon which AIA is not given/claimed will obtain relief through the 'main rate pool' or the 'special rate pool' rather than each item being dealt with separately.
    • The annual rate of WDA is 18% in the 'main rate pool' and 6% in the 'special rate pool'.
    • A 100% first year allowance (FYA) may be available on certain energy efficient plant and cars.

    Other allowances

    Corporation tax super-deduction on certain plant and machinery until 31 March 2023

    130%

    First Year Allowance (FYA) on certain plant, machinery and cars of 0 g/km

    100%

    Corporation tax FYA on long-life assets, integral features of buildings, etc. until 31 March 2023

    50%

    Corporation tax FYA (‘full expensing’) on certain new, unused plant and machinery from 1 April 2023

    100%

    Corporation tax FYA on new, unused long-life assets, integral features of buildings, etc. from 1 April 2023

    50%

    Cars

    • For expenditure incurred on cars, costs are generally allocated to one of the two plant and machinery pools.
    • AIA is not available on any car but a 100% first year allowance may be available on certain cars. To qualify for first year allowance, the car must be purchased new.

    Cars acquired from April 2021

    Emissions (g/km)

    Pool

    Allowance

    0 Main rate 100% FYA
    ≤ 50 Main rate 18% WDA
    >50 Special rate 6% WDA