Personal and business tax

What are Capital Allowances?

Capital allowances are tax deductions that UK businesses can claim on qualifying capital expenditure, such as equipment, machinery, and commercial vehicles, to reduce their taxable profits. Understanding what are capital allowances is crucial for maximising your business's tax efficiency, as they allow you to spread the cost of assets over several years or claim immediate relief through schemes like the Annual Investment Allowance.

By
Jordan Macey
Last updated
August 8, 2025
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What are Capital Allowances?

Capital allowance is an expenditure you can claim on assets you purchase for use in your business.

In addition to the purchase of business assets, you can also claim capital allowances for renovating business premises in disadvantaged areas in the UK, extracting minerals, research and development, patents and more. Further information can be found on the HMRC website.

Capital allowance is an expenditure you can claim on assets you purchase for use in your business.

In addition to the purchase of business assets, you can also claim capital allowances for renovating business premises in disadvantaged areas in the UK, extracting minerals, research and development, patents and more. Further information can be found on the HMRC website.

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