1024 - Annual allowances at 25% on cars costing £12,000 or less and equipment

You can claim capital allowances for the costs of, and improvements to, equipment and machinery (such as vehicles, tools, computers, business furniture) even if the item was purchased under hire purchase or an alternative finance arrangement (include the interest and other finance charges in the 'Interest on bank & other loans' field on the Total expenses page). Do not claim for things that you buy and sell as part of your trade - these should be claimed as business expenses.

Each year you can claim 25% of the cost or value of your equipment and machinery as an annual allowance. Add your equipment etc together and make a 'main pool' of cost or value (refer to the guidance about cars and items with any private use). The value of the pool goes down at the end of the year by the 25% you have claimed in this field. If your period of accounts is less than 12 months, the annual allowance has to be reduced proportionately. For example, if your accounts are for 6 months, the annual allowance will be 6 or 12 multiplied by 25%. Your starting point the following year is that reduced main pool value figure and you can claim 25% of that.

For further guidance and information please see the Notes on Self-employment (Full) (PDF 118K)

To view the guidance notes you need to use a PDF file viewer. You can get one at www.adobe.com