Capital allowances: the basics

Introduction

As a business you can claim tax allowances, called capital allowances, on certain purchases or investments. This means you can deduct a proportion of these costs from your taxable profits and reduce your tax bill.

Capital allowances are available on plant and machinery, buildings - including converting space above commercial premises to flats for renting - and research and development.

The amount of the allowance depends on what you're claiming for. In some cases, the rates are different in the year you make the purchase from those in subsequent years.

This guide will tell you what purchases or investments qualify for a capital allowance, how much you can claim and the simplest way to make your claim.

Subjects covered in this guide

• Introduction
• Capital allowance on plant and machinery
• Capital allowance on buildings
• Research and development capital allowances
• Work out your capital allowance claim
• Claiming capital allowances
• Special cases - capital allowance
• Here's how I made the most of tax allowances and credits available for research and development

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