What is the difference between tangible and intangible assets?

Tangible assets are physical items you can touch and see, such as equipment, vehicles, inventory, and property. Intangible assets are non-physical items like trademarks, patents, copyrights, and goodwill that still have monetary value for your business.

How do I value tangible assets for my small business?

Tangible assets can be valued using cost method (original purchase price minus depreciation), market value (current selling price in the market), or replacement cost (cost to replace with similar asset). Most small businesses use the cost method for accounting purposes.

Do I need to depreciate all tangible assets?

Not all tangible assets depreciate. Land typically appreciates in value, whilst equipment, vehicles, and machinery depreciate over time. Current assets like inventory don't depreciate as they're sold within a year. Only fixed tangible assets that wear out over time require depreciation.

What tangible assets can I claim as business expenses?

You can claim the cost of tangible assets as business expenses through depreciation allowances or Annual Investment Allowance (AIA). Equipment, vehicles, furniture, and machinery used wholly for business purposes are typically allowable expenses for UK tax purposes.

How should I record tangible assets in my accounts?

Record tangible assets on your balance sheet at their cost value minus accumulated depreciation. Keep detailed records including purchase date, cost, depreciation method, and current book value. Use accounting software like FreeAgent to track asset values automatically.

What happens to tangible assets when I sell my business?

When selling your business, tangible assets are typically valued at fair market value and included in the sale price. You may need to pay capital gains tax on any profit from asset disposal. The treatment depends on whether assets are sold separately or as part of the entire business.

Can I use tangible assets as collateral for business loans?

Yes, many tangible assets like property, equipment, and vehicles can be used as collateral for secured business loans. Lenders will assess the asset's value and condition to determine how much they'll lend against it.

How often should I review my tangible asset values?

Review tangible asset values annually during your year-end accounts preparation. More frequent reviews may be needed for high-value assets or if market conditions change significantly. Regular reviews ensure accurate financial reporting and insurance coverage.

What are Tangible Assets?

Published Apr 13, 2021

Last updated Jan 29, 2026

5 min read

Written by Jordan MaceyAAT

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<p>Tangible assets are physical assets or property owned by a company, such as equipment, buildings, and inventory.</p>

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What are Tangible Assets?

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