Last updated: 14 October 2026
Can you still claim the super-deduction?
No. The super-deduction gave companies a 130% first-year allowance on new main-pool plant and machinery bought between 1 April 2021 and 31 March 2023. It has ended. For spending now, companies can use full expensing (100% relief on new main-pool plant), the 50% first-year allowance for special-rate assets, the Annual Investment Allowance (AIA) of £1 million, and, from 1 January 2026, a new 40% first-year allowance that also covers assets bought for leasing.
Capital allowances available in 2026/27
| Allowance | Who can claim | Rate | Assets |
| Annual Investment Allowance | Companies, sole traders, partnerships | 100% up to £1m a year | Most plant and machinery, new or used, not cars |
| Full expensing | Companies only | 100%, no limit | New, unused main-pool plant |
| 50% first-year allowance | Companies only | 50% in year one | New special-rate assets, such as integral features |
| 40% first-year allowance | Companies and unincorporated businesses, from 1 January 2026 | 40% in year one | New main-pool plant, including assets for leasing |
| Zero-emission cars and chargepoints | All businesses | 100% | New zero-emission cars and EV chargepoints, to 31 March 2027 (companies) or 5 April 2027 (income tax) |
| Writing down allowances | All businesses | 18% main pool, 6% special rate | Anything not covered above |
What if you claimed the super-deduction?
If your company claimed the super-deduction and later sells the asset, a balancing charge may apply. For assets sold before 1 April 2023, the charge was multiplied by 1.3. If sold later, the charge is equal to the sale proceeds. Keep records of each asset that got super-deduction, its cost and its disposal date.
Example
Hollins Engineering Ltd buys a new CNC machine for £250,000 in 2026. It claims full expensing, so the whole cost is deducted from taxable profits in that year. At 25% corporation tax, that’s worth £62,500. If the company later sells the machine for £80,000, it will have an £80,000 balancing charge, which is taxable.
Choosing between AIA and full expensing
- AIA covers second-hand assets and is available to sole traders and partnerships
- Full expensing has no cap but is only for new assets bought by companies
- Assets bought for leasing can’t use full expensing, but the new 40% allowance can apply
- Use AIA first for special-rate assets, as full expensing only gives 50% on those
Claiming in time
Allowances are claimed in your company tax return, so you can still make or change a claim while the return can be amended, usually within 12 months of the filing deadline. Sole traders claim in their Self Assessment return.
Common mistakes
- Claiming full expensing on second-hand plant
- Claiming allowances on cars other than zero-emission cars at 100%
- Forgetting to bring in disposal values when assets are sold
- Claiming for buildings, which only qualify for the structures and buildings allowance at 3%
Frequently asked questions
Can a sole trader claim full expensing?
No, it’s for companies. Use the AIA or the 40% allowance instead.
Does full expensing cover vans?
Yes, new vans are main-pool plant.
What about used equipment?
The AIA covers it.
Do I need to choose which allowance?
Yes, in the capital allowances section of the return.
Related: the Annual Investment Allowance for sole traders, fixtures and capital allowances and first-year allowances for zero-emission cars.
Talk to Accotax
Want this handled for you? Our team at Accotax can help with capital allowances. See our small business accountants service, or contact us for a free, no-obligation quote.
This page is general guidance based on HMRC rules for the 2026/27 tax year, checked against gov.uk on 14 October 2026. It is not personal advice, so speak to an accountant about your own situation.
