Capital Allowances Guide 2026/27
Capital allowances let businesses deduct the cost of certain assets from taxable profits.
Main Allowances
| Type | Rate | Limit |
|---|---|---|
| Annual Investment Allowance (AIA) | 100% | £1,000,000 |
| Full Expensing (companies) | 100% | Unlimited |
| First Year Allowance (EVs) | 100% | Unlimited |
| Writing Down (main pool) | 18% | Unlimited |
| Writing Down (special pool) | 6% | Unlimited |
Annual Investment Allowance
Most businesses can deduct 100% of qualifying plant and machinery up to £1 million per year.
Qualifying assets:
- Machinery
- Computers
- Tools
- Vehicles (not cars)
- Office equipment
Full Expensing (Companies)
Companies can claim 100% first-year relief on qualifying plant and machinery - no limit!
Requirements:
- Must be a company (not sole trader)
- New and unused assets
- Not cars
Writing Down Allowances
For assets not covered by AIA or Full Expensing:
| Pool | Rate | Assets |
|---|---|---|
| Main | 18%/year | Most equipment |
| Special | 6%/year | Long-life assets, integral features |
Electric Vehicles
100% First Year Allowance on new electric vehicles:
- Zero-emission cars
- Electric vans
- Charging points
Related Calculators
- Capital Allowances Calculator - Calculate relief
- Corporation Tax Calculator - Company tax