What are capital allowances and what can I claim on?


You can claim capital allowances when you buy assets that you keep to use in your business. This means you can deduct some or all of the value of the item from your profits before you pay tax.

The items that you keep to use in your business are known as ‘plant and machinery’. Here’s what does and doesn’t count below:

What does not count as plant and machinery

You cannot claim capital allowances on:

  • things you lease - you must own them

  • buildings, including doors, gates, shutters, mains water and gas systems

  • land and structures, for example bridges, roads, docks

  • items used only for business entertainment, for example a yacht or karaoke machine

What counts as plant and machinery

Plant and machinery includes:

  • items that you keep to use in your business, including cars

  • costs of demolishing plant and machinery

  • parts of a building considered integral, known as ‘integral features’

  • some fixtures, for example fitted kitchens or bathroom suites

  • alterations to a building to install other plant and machinery - this does not include repairs

Integral features

Integral features are:

  • lifts, escalators and moving walkways

  • space and water heating systems

  • air-conditioning and air cooling systems

  • hot and cold water systems (but not toilet and kitchen facilities)

  • specialist electrical systems, including lighting systems

  • external solar shading


Fixtures

You can claim for fixtures, for example:

  • fitted kitchens

  • bathroom suites

  • fire alarm and CCTV systems

You can claim if you rent or own the building, but only the person who bought the item can claim.


When you buy a building from a previous business owner you can only claim for integral features and fixtures that they claimed for.


You must agree the value of the fixtures with the seller. If you do not you cannot claim for them. Agreeing the value also means the person selling the assets can account correctly for them.

If you let residential property

You can only claim for items in residential property if either:

  • you run a furnished holiday lettings business

  • the item is in the common parts of a residential building, for example a table in the hallway of a block of flats

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