Capital Allowances

Capital allowances are how the UK tax system gives you relief for capital expenditure: instead of deducting the cost of equipment, vehicles, fixtures and buildings as you would a normal expense, you claim allowances that reduce your taxable profits. Claimed well, they transform the after-tax cost of investment. Claimed badly — or not at all — they quietly hand money to HMRC that should be funding your growth.

The rules changed significantly for 2026/27, with a new 40% first-year allowance from January 2026 and a cut in the main writing-down rate from April 2026. That makes the choice of which allowance to claim, and when, more valuable than it has been for years. Acumon's tax team reviews your expenditure, identifies everything that qualifies and builds claims that stand up to HMRC scrutiny.

The Capital Allowances Landscape in 2026/27

There are now several routes to relief, and picking the right one matters. Full expensing gives companies a permanent 100% first-year deduction on new, unused main-rate plant and machinery, with a 50% first-year allowance for special rate assets. The Annual Investment Allowance (AIA) remains permanently set at £1 million a year and is often the better route for second-hand assets and for sole traders and partnerships, which cannot use full expensing.

From 1 January 2026 a new 40% first-year allowance is available, extending first-year relief to unincorporated businesses and some leased assets that full expensing does not cover. At the same time, the main-rate writing-down allowance falls from 18% to 14% from April 2026 — so expenditure left sitting in the general pool now takes noticeably longer to relieve. The special rate pool continues at 6%, and the structures and buildings allowance gives 3% a year on qualifying construction costs. The practical message: front-load relief through first-year claims wherever you can, because pooled relief is slower than it used to be.

Property Fixtures: The Most Commonly Missed Claim

When you buy, build or refurbish commercial property, a substantial part of the price often relates to qualifying fixtures — electrical and heating systems, air conditioning, lifts, sanitary ware and other integral features. These claims are routinely missed because they are buried in a single purchase price rather than itemised on an invoice.

We analyse purchase contracts and, where needed, arrange specialist surveys to identify and value qualifying fixtures. On a purchase or sale we advise on Section 198 elections, which fix the value of fixtures passing between buyer and seller — get this wrong at completion and relief can be lost permanently. Provided the statutory conditions are met, fixtures claims can often still be made years after the property was acquired, so a review of past purchases frequently uncovers real money.

Planning and Timing

Capital allowances planning is largely about timing and allocation: scheduling significant purchases either side of your year end, choosing between full expensing, the AIA and the 40% first-year allowance for each asset, and managing the interaction with losses and group relief. Disposals need planning too — assets on which full expensing was claimed trigger an immediate balancing charge when sold, so exit timing affects your tax bill.

We build capital allowances into your wider tax planning, so investment decisions are made with the after-tax cost in front of you, not discovered after the event.

How Acumon Handles Your Claim

We start with a review of your fixed asset registers and recent capital expenditure, then look back at earlier periods and property transactions for missed claims. We prepare the computations, make the claims in your corporation tax or self assessment return, and document the analysis so it is ready if HMRC ever asks. If an enquiry does arise, we handle the correspondence and defend the claim.

What You Get With Acumon

• Review of current and historic capital expenditure to capture missed allowances
• Full expensing, AIA and first-year allowance claims prepared and filed with your return
• Property fixtures analysis and Section 198 election support on purchases and sales
• Advice on timing capital spend around the 2026 rate changes
• Structures and buildings allowance claims on qualifying construction costs
• Documentation that stands up to HMRC scrutiny, with enquiry support if needed

Get a Fixed-Fee Quote

Tell us what you need and we'll come back within one business day with a clear scope and a fixed price — no hourly-rate surprises. Call 020 8567 3451 or use the form and we'll be in touch.