Capital allowances
How qualifying capital expenditure can reduce taxable profits through a claim.
How qualifying capital expenditure can reduce taxable profits through a claim.
Capital allowances require a claim
Reviewed · Current · Law · Current reviewed treatment; earlier start date not yet established
An allowance is made only on a claim, and the claimant may generally claim less than the full available amount.
A computed maximum is not a filed claim or completed action. Sterling keeps the calculation, proposed election and submission separate.
Exceptions and branches
- The permitted amount and claim mechanics depend on the allowance and filing route.
Current headline rules
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Annual Investment Allowance: £1,000,000 annual maximum, adjusted for relevant period and related-business facts.
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Company main-pool writing-down rate: 14% for periods beginning on or after 1 April 2026.
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Special-rate pool: 6%; adjusted small-pool limit: £1,000.
Relief is available only through a claim. These figures do not establish that an asset qualifies or that any action has been completed.
Worked example
A company buys £8,000 of ordinary computer equipment for its trade. If the expenditure qualifies and the company has its full AIA available, the current structured rule can support an £8,000 capital-allowance deduction. That is only a proposed claim: the cash-tax effect still depends on taxable profit, losses, associated businesses and the applicable Corporation Tax calculation.
Sterling shows the reconciled acquisition, assumptions, calculation and missing facts. It never files or posts the claim merely because it found an opportunity.
Related concepts
Linked from
Sources
- Capital Allowances Act 2001, section 3 — Section 3(1) and (2). Primary authority.
Knowledge version: sterling-knowledge@2026-09-11.7. Last checked 11 September 2026.