Annual Investment Allowance
Qualifying plant and machinery within the AIA limit.
Accounting depreciation does not determine the Corporation Tax or Income Tax relief for capital expenditure. Plant, machinery, fixtures, commercial-property expenditure and cars can each enter a different capital-allowance regime.
Capital expenditure is easiest to analyse when the invoices, asset descriptions and project details are still available. A year-end fixed-asset total is often too broad for a proper claim.
Asset type, cost and purchase date are useful at enquiry stage.
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The asset, claimant, purchase date and intended use determine which capital-allowance route is available.
A company should not automatically claim the first allowance it sees. AIA, full expensing, first-year allowances and writing-down allowances can interact differently depending on the expenditure.
A claim is strongest when the underlying assets and invoices are identified rather than grouped into one broad fixed-asset total.
Qualifying plant and machinery within the AIA limit.
Qualifying new company plant and machinery.
New main-rate plant and machinery acquired from 1 January 2026 where relevant.
Assets falling outside the main pool.
Fixtures and Structures and Buildings Allowance where applicable.
Balancing and disposal consequences following earlier claims.
Invoices and projects are reviewed.
Main pool, special rate, structures or other categories are identified.
Available allowances are compared.
The tax computation and asset records are aligned.
AIA, full expensing and the new 40% first-year allowance can overlap in purpose but do not have identical qualifying conditions.
Cars do not qualify for AIA, full expensing or the new 40% first-year allowance in the same way as ordinary qualifying plant and machinery. Vehicle classification therefore matters.
Current £1 million AIA rules.
AIA guidance ↗Current conditions for the allowance introduced from January 2026.
40% allowance ↗Potentially through AIA or full expensing where the relevant conditions are met.
It is a first-year allowance for qualifying new and unused main-rate plant and machinery acquired from 1 January 2026.
Accounting depreciation is generally added back and tax relief is considered through capital allowances instead.
No. Cars have their own capital-allowance rules.
Potentially. A fit-out can contain several asset categories and should be analysed by component.
Ideally while invoices and asset details are still available rather than years after a large project.