Posted by Nick Day on 05 Dec 2014

Capital Allowances – Are You Claiming All You Can?

In general, capital expenditure is not allowed as a deduction when calculating the taxable profits of your business. Instead, relief for capital expenditure is given via capital allowances, which seek to give relief over the life of a qualifying asset by providing a tax deduction on a reducing balance basis at 8%, 18% or 100% depending on the type of asset.

Annual Investment Allowance

Businesses also receive an Annual Investment Allowance each year. Qualifying capital expenditure up to this AIA receives 100% relief. From April 2014 to December 2015 the government has increased the limit for the Annual Investment Allowance to £500,000, meaning most businesses will receive full tax relief for all their qualifying capital expenditure in this period. It is, therefore, important to identify all capital expenditure that qualifies for allowances in order to maximise relief.

The legislation for the qualification of assets as plant & machinery is complicated and the application of this legislation together with the extensive case law surrounding this area is dependent on the individual circumstances of the trade and the asset.

Tax Innovations can help you to identify the expenditure that will qualify for capital allowances and ensure that you are making the maximum claim for tax relief.

Contact Tax Innovations

If you wish to discuss capital allowances, or would simply like to discuss other ways in which we could help you or your business, please contact us on 01962 856990 or


See also…

New Pooling Requirements Limit Capital Allowances Claims

Capital Allowances: Annual Investment Allowance

Tax Rates and Allowances

Relief for Capital Expenditure

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