Check if you can claim full expensing or 50% first year allowances
If you’re a company, find out if you can claim full expensing or the 50% first year allowance on plant or machinery costs.
Full expensing and the 50% first year allowance are first year capital allowances you can claim on the cost of qualifying plant or machinery.
You may be able to claim these allowances if both of the following apply:
- you are a company which is subject to Corporation Tax
- you incurred the expenditure on or after 1 April 2023
If you cannot claim these allowances, check what allowances you can claim.
If you sell or dispose of an asset that you have claimed these allowances for, you must work out the correct charge to add when working out your taxable profits.
Check if your plant or machinery will qualify
What counts as plant and machinery will depend on the nature of your business.
To make a claim for full expensing or 50% first year allowance, the plant or machinery must:
- be new and unused
- not be:
- given to you as a gift
- a car (other vehicles may qualify for full expensing) — find out about claiming capital allowances on cars
- bought to lease to someone else (unless it is background plant or machinery within a building)
- purchased in the accounting period the business activity ceases
If you lease background plant or machinery
If you lease out commercial property, you may be able to claim for background plant or machinery in the leased buildings. These are the things installed in a building to make it usable and include (but are not limited to):
- lighting
- wiring
- central heating
Check which allowance you can claim
If your claim is for main rate plant or machinery, you can deduct all of the cost under full expensing when working out your taxable profits.
If your claim is for special rate plant or machinery you can deduct half of the cost under the 50% first-year allowance when working out your taxable profits. Add the balance of the expenditure to your special rate pool in the following accounting period to claim writing down allowances.
Expenditure on special rate plant or machinery may qualify for the 100% annual investment allowance.
Check if your assets are eligible to claim
Check if you can claim for full expensing or 50% first year allowance if you know:
- the accounting period of the business
- information about the plant or machinery, including:
- the cost of the asset (including delivery and installation charges)
- how it was obtained (for example if it was purchased outright or on hire purchase)
Make a claim
You can claim for full expensing or 50% first year allowances on your Company Tax Return.