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Capital Allowances

On the purchase of assets for use by your business, you may be able to benefit from the availability of capital allowances and therefore reduce your tax bill.

We can provide you with advice and support to help correctly identify the availability of capital allowances, including particular areas where allowances are often missed, including

  • The purchase of commercial property
  • The sale of commercial property
  • The purchase of a trade
  • Leasing and Hire Purchase

What are Capital Allowances?

Capital allowances are available for expenditure on capital items used in a business (e.g. plant and machinery, cars, computers, tools, etc.), along with integral features of a building such as lighting, hot/cold water systems, and air conditioning.

The rates of relief range from 100% to 8%, depending on the type and amount of capital expenditure.

Prior to 29 October 2018, all capital expenditure relating to the structure of buildings was not eligible for capital allowances. However, since then the Structures and Buildings Allowance (“SBA”) became available for costs incurred in relation to the construction, conversion, and/or renovation of non-residential structures and buildings. Further information regarding the SBA can be found on our blog.

Determining what is eligible for capital allowances is not always clear and a substantial body of case law has built up to govern its application.  Capital allowances are often missed and therefore an independent review is important

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