"Buy Smart, Save Tax: The Power of Capital Allowances"
Posted on 1st May 2025 at 09:57
🧾 How to Cut Your Business Tax Bill Using Capital Allowances
💡 Did you know?
You can reduce your tax bill when you buy long-term assets for your business—think vans, laptops, machinery, or even software.
It’s called capital allowances. And it can seriously lower your Corporation Tax. 👇
🔍 What are capital allowances?
They’re a type of tax relief for business purchases expected to last over a year.
Instead of paying tax on the full profit, you deduct part (or all) of the asset’s value = less tax to pay!
💸 Why it matters:
✅ Reduces your tax bill
✅ Encourages investment in your business
✅ You can even carry unused allowances forward to future years
🛠 What can you claim on?
You must own the item and use it for business.
Examples include:
🚐 Vans & trucks
🧰 Machinery & tools
💻 Computers & software
🪑 Office furniture
🔧 Building changes to install equipment
❌ No claims on leased items, buildings, or entertainment gear
💰 Expenses vs. Capital Allowances
Here’s the difference:
Capital Allowances = Big, long-term buys (like a van)
Expenses = Short-term costs (like van insurance)
Both reduce tax—but only long-term assets qualify for capital allowances.
🚘 What about cars?
Car rules are different!
You can only claim the full amount in year 1 if it’s electric or low-emission.
Otherwise:
18% allowance for regular cars
6% for high-emission vehicles
✅ Electric = better tax savings
📉 Selling or scrapping assets?
If you sell it for:
Less than its written value = claim more tax relief
More than its value = you might owe tax
Choose the right allowance early, it affects how much tax you’ll pay later.
🧮 How to claim:
Tick the capital allowances box when you file your tax return.
Make sure your calculations are solid, or ask your accountant to check.
⚠️ Capital Allowances = Complex!
The rules are tricky—but the savings are worth it.
💬 Tip: Talk to a pro before making big purchases.
A smart plan = bigger tax savings 💼
💬 Got questions about claiming capital allowances? Drop JSB call or send us a DM!
#SmallBusinessTips #UKTax #CapitalAllowances #BusinessFinance #TaxRelief #HMRC #BusinessGrowth #JSB
As a family-run company, we pride ourselves on providing a bespoke service tailored to your particular needs.
Above all, our objective is to save you time, money and effort in managing your accounts, leaving you free to focus on building your business.
Remember, you’re not alone, we’re always here to help if you have an accounts problem or query.
This content will only be shown when viewing the full post. Click on this text to edit it.
Share this post: