--- title: Annual Investment Allowance and other Capital Allowances (2024-25) description: Capital Allowances give tax relief on assets and equipment, reducing corporation tax.  How to claim Annual Investment Allowance & Capital Allowances. image: https://blog.shorts.uk.com/hubfs/capital%20allowances.jpg --- [![Shorts_logo_White](https://blog.shorts.uk.com/hubfs/New%20Site%202018/Shorts_logo_White.svg "Shorts_logo_White")](https://www.shorts.uk.com/) [Blogs & News](https://blog.shorts.uk.com/) > [Business Taxes](https://blog.shorts.uk.com/topic/business-taxes) # Annual Investment Allowance and other Capital Allowances (2024-25) Scott Burkinshaw - 14 March 2024 ###### Select topic - Please Select - [ Audit ](https://blog.shorts.uk.com/topic/audit) [ Business Taxes ](https://blog.shorts.uk.com/topic/business-taxes) [ Radius – R&D Tax Relief & Patent Box ](https://blog.shorts.uk.com/topic/radius-rd-tax-relief-patent-box) [ Corporate Finance ](https://blog.shorts.uk.com/topic/corporate-finance) [ GENUS Management Accounts ](https://blog.shorts.uk.com/topic/genus-management-accounts) [ VAT ](https://blog.shorts.uk.com/topic/vat) [ Private Client ](https://blog.shorts.uk.com/topic/private-client) [ Payroll ](https://blog.shorts.uk.com/topic/payroll) [ EOT ](https://blog.shorts.uk.com/topic/eot) [ International Taxes ](https://blog.shorts.uk.com/topic/international-taxes) ![featured image](https://blog.shorts.uk.com/hubfs/capital%20allowances.jpg)   ###### Capital Allowances are the mechanism by which tax relief is obtained on the depreciation of assets and equipment and can result in substantial tax savings.  There are several ways in which Capital Allowances can be claimed, and businesses should seek to maximise these where possible in order to minimise tax. When businesses buy equipment, they can't deduct the cost from their taxes as a business expense. However, they can get tax relief through something called capital allowances. These allowances apply to various assets, such as machinery, furniture, computers, and vehicles used for business purposes. Special rules apply to cars and eco-friendly equipment. Owners who rent commercial properties to businesses can qualify for these allowances. Learn more about [reducing your Capital Gains Tax bill in our blog](https://blog.shorts.uk.com/13-ways-to-reduce-your-capital-gains-tax-bill). ## Annual Investment Allowance The Annual Investment Allowance (AIA) lets businesses write off 100% of the cost of most equipment, except cars, up to a set yearly limit. If they can't claim AIA, they may be able to use Writing Down Allowances (WDA) for their expenses. ### AIA limits - companies | #### Annual limit | | --- | | £ | | **1,000,000** | ### AIA limits - sole traders and partnerships | #### Annual limit | | --- | | £ | | **1,000,000** | ## Other Capital Allowances As well as the generous Annual Investment Allowances, there are various other Capital Allowances available to business owners. | First Year Allowance (FYA) on certain plant, machinery and cars of 0g/km (for cars purchased before 1 April 2025) | 100% | | --- | --- | | Corporation tax FYA (‘full expensing’) on certain new, unused plant and machinery from 1 April 2023 | 100% | | Corporation tax FYA on new, unused long-life assets, integral features of buildings, etc. from 1 April 2023 | 50% | ### Structures and Buildings Allowance The Structures and Buildings Allowance was introduced in the 2018 Budget and applies to new non-residential structures and buildings.  Relief is provided on eligible construction costs incurred on or after 29 October 2018 at an annual rate of 2% on a straight-line basis.  This means that costs which historically may not have qualified for Capital Allowances may now do so.  Business owners should not assume that costs do not qualify just because they have not qualified in the past. ## Cars When businesses spend money on cars, they usually put the costs into one of two groups for tax purposes. The Annual Investment Allowance (AIA) can't be used for cars, but some cars might qualify for a 100% allowance in the first year if they're bought brand new. ### Cars acquired from April 2021 | #### Emissions (g/km) | #### Pool | #### Allowance | | --- | --- | --- | | 0 | Main rate | **100% FYA** | | ≤ 50 | Main rate | **18% WDA** | | >50 | Special rate | **6% WDA** | ## We are here to help Our dedicated [tax planning team](https://www.shorts.uk.com/about/team/?person_name=&department=business-taxes&position=) regularly help clients with capital allowance queries.  If you require any advice, then begin your journey with us today; [drop us a line ](https://www.shorts.uk.com/business-taxes/#contactform)and let's start talking about how we can save you tax. ![author](https://blog.shorts.uk.com/hubfs/Scott%20Burkinshaw%20600x600-1.jpg) #### Scott Burkinshaw I am Head of Business Taxes at Shorts, where I lead our specialist Radius team focusing on R&D tax relief. As a Chartered Tax Adviser with over a decade of experience at national and international firms, I work with businesses and their owners to provide strategic corporate and personal tax advice. My expertise includes R&D tax relief, business disposals and acquisitions, and long-term tax planning, helping clients achieve their goals in the most efficient way. [View my articles](https://blog.shorts.uk.com/author/scott-burkinshaw) Tags: [Business Taxes](https://blog.shorts.uk.com/topic/business-taxes) Share this on - - - [Questions? Get in touch with us](https://www.shorts.uk.com/contact/) ###### Tax Saving Guide 2026-27 Written especially for entrepreneurs and owner-managed businesses, this guide is full of planning ideas and tax risks to avoid. [ Download now ](https://info.shorts.uk.com/en-gb/tax-saving-guide) ![Tax saving guide 2026-27](https://blog.shorts.uk.com/hs-fs/hubfs/Tax%20saving%20guide%202024.jpg?width=375&height=465&name=Tax%20saving%20guide%202024.jpg) ###### Related articles ##### [What is the new Capital Allowances Super-Deduction?](https://blog.shorts.uk.com/new-capital-allowances-super-deduction) ##### [Income Tax Allowances - 2025/26](https://blog.shorts.uk.com/income-tax-allowances-2024/25) ##### [Annual Investment Allowance & the Super-Deduction](https://blog.shorts.uk.com/annual-investment-allowance-the-super-deduction) ##### [IHT & the Seven-Year Rule explained: gifts, taper relief, allowances](https://blog.shorts.uk.com/iht-and-the-seven-year-rule-explained-gifts-taper-relief-and-allowances) ###### Latest articles [A case of aggressive tax avoidance: Glasgow Rangers Football Club](https://blog.shorts.uk.com/aggressive-tax-avoidance-affect-you) [What is VAT? - Complete Guide (Updated for 2025/26)](https://blog.shorts.uk.com/what-is-vat) [Ashgate Hospice Sparkle Night Walk 2026](https://blog.shorts.uk.com/ashgate-hospice-sparkle-night-walk-2026) [Stocktaking guide for UK businesses](https://blog.shorts.uk.com/stocktaking-guide-for-uk-businesses) [Supporting the Chatsworth Cascade for future generations](https://blog.shorts.uk.com/supporting-the-chatsworth-cascade-for-future-generations) [Deal of the Year win at Insider Dealmakers Awards 2026](https://blog.shorts.uk.com/deal-of-the-year-win-at-insider-dealmakers-awards-2026) [Football shirt Wednesday: Backing England in style](https://blog.shorts.uk.com/football-shirt-wednesday-backing-england-in-style) [Understanding lifetime trusts: the basics](https://blog.shorts.uk.com/understanding-lifetime-trusts-the-basics) [Close company directors face new HMRC detail requirements in 2026](https://blog.shorts.uk.com/close-company-directors-face-new-hmrc-detail-requirements-in-2026) [Shorts advise Harris Irwin Architects on successful growth funding.](https://blog.shorts.uk.com/shorts-advise-harris-irwin-architects-on-successful-growth-funding) #### About Us Use this little footer to reinforce your message about who you are and why people love working with you. 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