Claim Capital Allowances

You can claim capital allowances when you buy assets that you keep to use in your business, for example: 

These are known as plant and machinery (external link). 

You can deduct some or all of the value of the item from your profits before you pay tax. 

If you are a sole trader or partner and have an income of £150,000 or less a year, you may be able to use a simpler system called cash basis (external link) instead. 

Work out the Value of your Item 

In most cases, the value is what you paid for the item. Use the market value (the amount you’d expect to sell it for) instead if: 

  • you owned it before you started using it in your business 

  • it was a gift 

Other Business Costs 

You claim for the cost of things that are not business assets in a different way. This includes: 

  • your business’s day-to-day running costs 

  • items that it’s your trade to buy and sell 

  • interest payments or finance costs for buying assets 

Claim these costs as business expenses (external link) if you are a sole trader or partner, or deduct from your profits as a business cost if you are a limited company. 

Other Capital Allowances 

As well as plant and machinery, you can also claim capital allowances for: 

If you let out Residential Property 

You can only claim for items in residential property if your business qualifies as a furnished holiday lettings business. In each year the property must be: 

  • available for holiday letting for 210 days 

  • let for 105 days or more 

See Also: