The Annual Investment Allowance
Up to £1 million a year of most plant and machinery comes off your profit in full, in the year you buy it. It is not available on cars.
Fixed assets and capital allowances
What the business buys to keep, and the tax relief on it.
A van, tools, machinery or a computer is a fixed asset: the business keeps it and uses it for years. How you get tax relief on it depends on how you keep your books. On the cash basis, now the default for sole traders, most equipment is simply an expense; otherwise, and always for a company, it is relieved through capital allowances. Here is how they work, and what Stoneledger does about it.
Capital allowances
Most of it in the year you buy it, the rest over time.
Writing down allowances
Whatever is not covered goes into a pool and is relieved a share at a time: 14% a year for most things from April 2026, 18% before, and 6% for the special rate pool. A pool of £1,000 or less can be claimed in full.
Cars
A new electric or zero-emission car bought before April 2027 can be claimed in full in its first year. Other cars go in the main or special rate pool, depending on their CO2 emissions.
HMRC sets it all out in its guide to claiming capital allowances, including the 40% first-year allowance on main rate items bought from 1 January 2026.
What changes it
How you keep your books, how you use it, and selling it.
On the cash basis
The cash basis has been the default for sole traders and partnerships since 6 April 2024. On it, equipment you buy to keep is an ordinary business expense, and capital allowances are claimed on business cars only.
Private use
Use something outside the business as well, and you claim only the business share. A £600 laptop used half the time privately has its allowance cut by half.
Selling it
When you sell, give away or stop using something you claimed on, its value goes back into the calculation for that year. If you had claimed it in full and the pool has nothing left, the value is added to your profit: a balancing charge.
HMRC’s own pages: the cash basis and capital allowances when you sell an asset.
What Stoneledger does
A register of what you own, with the allowances worked year by year.
- Everything the business owns, with what it cost, the depreciation in the accounts and what it is worth now, asset by asset.
- The capital allowance pools, year by year, each year at its own rate: the Annual Investment Allowance first, then the main and special rate pools, and cars by their emissions.
- Private use taken off, with anything you also use privately kept in a pool of its own, as HMRC requires.
- Selling, done properly. The price goes into the right pool, and any balancing charge or allowance is worked out and explained.
- Depreciation out, allowances in. Your tax figure adds back the depreciation and takes off the allowances, and shows the adjustment rather than making it quietly.
- Every figure opens. Click one and you see the working behind it. You do not have to take Stoneledger’s word for a number.
What it costs
£8 a month or £50 a year. That is the whole price.
One plan, with everything in it: the books, fixed assets, your Self Assessment or Corporation Tax, VAT, CIS, payroll and journals. No tiers to climb and no add-ons. 30 days free, no card needed. How that compares
Every van, tool and machine, and the relief on each.
Stoneledger keeps what the business owns with the allowances worked out year by year, and every number opens onto the working behind it.