Capital Allowances (Annual Investment Allowance): Who Qualifies and What You Get
Learn how businesses can deduct the cost of equipment, machinery, and vans from their profits to reduce their tax bill.
This scheme allows businesses to deduct the cost of certain assets from their taxable profits.
Who it's for
This is for businesses that need to purchase equipment, machinery, or vans to help run their operations.
What you get
You can deduct the full value of these business items from your profits before tax is calculated. This effectively lowers the amount of profit you are taxed on.
What it costs you
There is no fee to use this scheme, but you must keep all your original receipts for every piece of equipment or vehicle you purchase.
The catch to know
You cannot claim for items used for personal reasons. If an item is used for both business and personal purposes, you can only claim for the portion used exclusively for your business.
How to apply
- Purchase the equipment, machinery, or van required for your business.
- Save and organize all original purchase receipts and invoices.
- Include these costs when completing your business tax returns.