What qualifies as a fixed asset for a small business?

A fixed asset is a long-term tangible resource owned by your business that provides value over multiple years and costs more than your capitalisation threshold (typically £500-£1,000). Examples include office equipment, machinery, vehicles, furniture, and property used for business purposes.

How do I calculate depreciation on fixed assets?

The most common method is straight-line depreciation: (Cost - Residual Value) ÷ Useful Life in Years. For example, a £5,000 computer with 5-year life and £500 residual value would depreciate £900 annually. Always consult your accountant for the best depreciation method for your business.

Do I need to register all my business assets?

You should maintain an asset register for all fixed assets above your capitalisation threshold. This helps track depreciation, insurance coverage, and ensures accurate financial reporting. Small items under £500 can typically be expensed immediately rather than capitalised.

Can I claim capital allowances on fixed assets?

Yes, many fixed assets qualify for capital allowances, which can provide immediate tax relief. The Annual Investment Allowance (AIA) allows 100% relief on qualifying plant and machinery up to £1 million annually. Consult your accountant to maximise these allowances.

What happens when I sell or dispose of a fixed asset?

When disposing of a fixed asset, calculate the gain or loss by comparing the sale proceeds to the asset's net book value (cost minus accumulated depreciation). This may result in a taxable gain or allowable loss that affects your corporation tax or self-assessment.

How often should I review my fixed asset register?

Review your asset register at least annually, ideally quarterly. Check for damaged or obsolete assets, update depreciation calculations, and ensure insurance coverage remains adequate. Regular reviews help maintain accurate financial records and identify disposal opportunities.

What are Fixed Assets?

Last updated Feb 2, 2026

1 min read

Written by Jordan MaceyAAT

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<p>Fixed assets are property or equipment that a company owns, and uses in its day-to-day operations for income generating activities. These include machinery, equipment, buildings and land.</p>

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What are Fixed Assets?

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