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A technical guide to capital allowances

Capital allowances serve as a critical mechanism for businesses to mitigate the financial burden of buying assets for operational use.

These allowances enable companies to write off the cost of assets against their taxable income, thereby reducing their overall tax liability.

This article aims to provide an in-depth understanding of the intricacies involved in capital allowances and how your business can use them to its advantage.

Types of capital allowances

Eligibility criteria

Generally, assets must be ‘plant or machinery’ used for business purposes. This includes everything from office furniture to industrial machinery, but buildings and land typically do not qualify.

Claiming process

The process of claiming capital allowances involves several steps:

Points to consider

Understanding the nuances of capital allowances can be complex but is essential for optimising tax efficiency.

Proper planning and consultation with experts can help you navigate this intricate landscape effectively and increase your business’s profitability by reducing tax liabilities.

Speak to one of our experts to discuss the above further.


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