You may be able to reduce your business tax bill to take account of money it spends on assets by claiming capital allowances.
You can claim capital allowances if you’re running a limited company or if you’re self-employed.
Get basic information on capital allowances from HM Revenue & Customs, as well as detailed guides on claiming capital allowances for:
- plant and machinery
- buildings and renovations
Spending money on things like this is called ‘capital expenditure’.
You must not claim capital expenditure as business expenses.
First year allowances
First year allowances let you claim 100% of the cost of specific assets in the tax year you buy them. This includes:
- water efficient technologies
- energy saving products
How to claim
Sole traders and business partnerships
You can’t claim capital allowances on a vehicle you’re claiming simplified expenses for.
If you’re a sole trader, you must claim capital allowances in your Self Assessment tax return.
If you’re a partnership, you must claim in the partnership’s Self Assessment tax return, not any of the individual partners’ returns.
If you’re a limited company, you must make a claim in your Company Tax Return.
You must include a separate capital allowances calculation as part of your Company Tax Return.
Claim capital allowances to reduce your business’ tax bill to take account of money you’ve spent on assets – plant, machinery, buildings, renovations, first year allowances, water efficiency, energy saving