Capital allowances: what they are and how can you claim them

Working for yourself may give you more freedom and flexibility, but it also means you are responsible for funding everything from your own office equipment to company cars. Some smaller costs may be classed as business expenses that help reduce your taxable profit, but it is also possible to get tax relief on larger spending and the value of certain items. These are known as capital allowances and let you purchase items to specifically use for your business, such as tools and machinery, as well as deducting a percentage of the value of certain assets from your profits each year. Capital allowances can assist the self-employed with cash flow management, ultimately helping your business grow and allowing you to better manage profits so more money goes into your business rather than to HMC. Here is what you need to know. Running your own business can be expensive. There is no department that will sort your stationery, change light bulbs or make sure your computer or phone works, it is all up to you. Capital allowances provide tax reliefs that businesses can claim on certain types of spending to encourage investment. It typically applies to high-cost assets such as equipment, machinery,...

Read more