C is for ...

We are celebrating this festive time of year with a Christmas Selection Box of different tax reliefs and exemptions. As it is the time for giving and sharing, we hope that our "Box" will save you pounds rather than adding them!

C-H-R-I-S-T-M-A-S

C is for Capital allowances

  • Capital allowances are the tax equivalent of depreciation and can be claimed by businesses buying assets to use in their trade or profession.
  • These allowances are claimed as a deduction from profits or they can increase a trading loss.
  • Capital allowances are set at different rates depending on the type of asset, the type of person making the claim, and the location of the business.
  • Not all assets qualify for capital allowances: they must be purchased for use in a business.
  • In the case of motor cars capital allowance claims are restricted according to the vehicle's emissions and whether purchased new or second hand.

Capital allowances: 'hacks'

  • Think very carefully about capital allowances when buying or selling a commercial property: do not simply rely on your conveyancer to investigate for you. See Fixtures.
  • Sole traders and partnerships may claim allowances on a proportion of the cost of an asset if it was acquired for mixed business and personal use. See Capital allowances: self employed
  • Careful use of pooling rules may have significant effect on allowances. See Capital allowances
  • Check the current rules when purchasing a motor vehicle: the rules seem to change almost every year because they really do. See Motor Vehicle allowances
  • Know your assets: certain assets are treated as having a long life and their allowances are restricted accordingly. See Capital allowances
  • The new Structures and Building allowance should not be overlooked. This applies to eligible construction costs incurred on or after 29 October 2018. See Buildings and Structures
  • Residential property business come under a totally different system: you cannot claim capital allowances however you may claim Replacement of Domestic Items relief instead. 

Our selection box so far...

C - H - R - I S T M A S

Useful resources

See Capital allowances: Tools and guides

At a glance