If you run a business and are paying tax in the UK, you may be eligible for capital allowances. These allowances allow you to claim tax relief on certain costs of buying or improving property and equipment. If you own a commercial property, residential rental properties, or any qualifying assets, we can help you understand what qualifies for allowances and maximise the tax benefits available to you.
Our specialist consultants provide clear, customised advice to ensure you're making the most of the allowances available while navigating complex rules.
Capital allowances are available to those operating a business as an individual, partnership, company, trustee or overseas investor registered under the non-resident landlord scheme.
Capital allowances compensate for depreciation not normally being deductible for tax purposes. Qualifying activities for capital allowances are:
The scope of where capital allowances may apply is extremely broad, which makes it easy for businesses to overlook certain types of expenditure that are in fact eligible. It is therefore common however for businesses to underestimate the proportion of their capital expenditure that qualifies for capital allowances, meaning you may be paying too much tax.
It is also important to review the capital allowances position when purchasing a commercial property, as there are a specific set of rules which apply that may restrict your ability to claim for capital allowances on any existing plant and machinery within the building. This may come as a shock after the event, but if you know about this in advance of any purchase you can agree appropriate commercial terms; and we can assist with this.
Note: although capital allowances have a wide application and all business owners can benefit from them (even those who don’t own property), at ETC Tax we most often see them discussed in the context of property transactions, hence including them here.
Capital allowances let you claim tax relief on certain types of capital expenditure, such as equipment, machinery, and parts of commercial property. They help offset the cost of assets that lose value over time, reducing your taxable profit and, in turn, your tax liability.
Capital allowances are available to individuals, partnerships, companies, trustees, and even non-resident landlords. Whether you're running a trade orproperty businessyou may be eligible to claim.
No. While property ownership often involves qualifying expenditure, you don’t need to own property to benefit. Any eligible capital investment in plant, machinery, or equipment used for business may qualify, whether you're a tenant, contractor, or investor.
When purchasing commercial property, you may lose the ability to claim capital allowances on existing plant and machinery if terms aren’t negotiated up front. We can assist during the purchase process to make sure any claims are protected before the sale completes.
The rules are broad, and eligible costs are often hidden in larger project budgets. Many businesses overlook claimable items like lighting, heating systems, or “built-in” equipment. We can conduct a detailed review to identify what qualifies and ensure nothing is missed.
