{"id":1431,"date":"2024-02-07T16:43:52","date_gmt":"2024-02-07T16:43:52","guid":{"rendered":"https:\/\/www.duport.co.uk\/blog\/?p=1431"},"modified":"2025-10-24T17:03:00","modified_gmt":"2025-10-24T16:03:00","slug":"a-guide-to-capital-allowances","status":"publish","type":"post","link":"https:\/\/www.duport.co.uk\/blog\/a-guide-to-capital-allowances\/","title":{"rendered":"Unlocking Tax Savings: A Guide to Capital Allowances for UK Businesses"},"content":{"rendered":"

Today we are going to outline the world of capital allowances. A topic that could help slash your tax bill and keep some of your hard-earned money in your pocket. Capital allowances are available to limited companies, sole traders, and partnerships, however, the sole trading\/partnership business must have a turnover of more than \u00a3150k.<\/p>\n

What are capital allowances?<\/strong><\/h4>\n

Capital allowances are a UK corporation tax (CT) break for business assets, letting you deduct all or a portion of the value of a business item from your profits. Reducing your taxable turnover and therefore your tax bill. For example, investing in some new equipment such as computers, shop fittings or a company van, can be the answer to a tax break.<\/p>\n

Types of Capital Allowances<\/strong><\/h4>\n

Falling into two main types:<\/p>\n

    \n
  1. Plant & Machinery (P&M): covering spending on business equipment. Commercial property fixtures such as air-conditioning, data cabling or fitting a worker\u2019s kitchen.<\/li>\n
  2. Structures and Buildings (SBAs): This is a flat-rate 3% relief for investment in buildings and structures not qualifying for P&M allowances.<\/li>\n<\/ol>\n

    There is one other relief \u2013 Land Remediation Relief \u2013 however, this 150% relief on CT is given to derelict or contaminated land & buildings being cleaned up & brought back into economic use.<\/p>\n

    How Capital Allowances Work<\/strong><\/h4>\n

    Capital allowances allow you to write in a percentage of the asset\u2019s cost each year for tax. Rates depend on the type of asset and when the investment was made.<\/p>\n

    Limited Companies can claim:<\/strong><\/p>\n