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 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
You can claim for fixtures, for example:
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