Full expensing is a generous capital allowances measure that lets companies deduct the cost of qualifying plant and machinery in full, in the year of purchase. For businesses investing in equipment, it can significantly accelerate tax relief.
How Full Expensing Works
Under full expensing, companies can claim a 100% first-year allowance on qualifying new main-rate plant and machinery. Instead of spreading relief over several years, the entire cost is deducted from taxable profits straight away, improving cash flow.
What Qualifies?
Full expensing generally applies to new and unused main-rate plant and machinery bought by companies. A separate first-year allowance covers certain special-rate assets. Cars and items bought to lease are usually excluded, so eligibility should be checked.
Points to Watch
Because relief is given upfront, disposing of an asset later can trigger a balancing charge. Timing of expenditure and the type of asset both affect the benefit, so planning matters.
How TaxDigit Can Help
Our Guildford-based team helps companies use full expensing and other capital allowances effectively. Contact us to plan your investment tax-efficiently.
Full Expensing: UK-Wide Capital Allowances Support
Full expensing benefits companies investing in equipment right across the United Kingdom, not just those near our Guildford head office. TaxDigit helps companies UK-wide make the most of full expensing and the wider capital allowances available on their spending.
Our chartered certified accountants identify qualifying plant and machinery, apply the right allowance and plan the timing of investment for the best tax outcome. We support clients UK-wide, both remotely and from our Guildford office.
Full expensing is generous, but it does not apply to everything. Cars, assets bought to lease out and certain second-hand or connected-party purchases are treated differently, and disposals later on can trigger a balancing charge. We make sure each item is allocated to the correct allowance, including the annual investment allowance and special rate pools, so your claim is both maximised and accurate.
How we help with full expensing
- Identifying expenditure that qualifies for full expensing
- Coordinating full expensing with the annual investment allowance
- Planning the timing of capital investment for tax efficiency
- Handling balancing charges on the disposal of assets
- Allocating costs correctly between main and special rate pools
HMRC explains the measure here: HMRC guidance on capital allowances full expensing.
Frequently Asked Questions
What is full expensing?
Full expensing lets companies deduct the full cost of qualifying new plant and machinery from their profits in the year of purchase, rather than spreading the relief over several years.
What does not qualify for full expensing?
Cars, assets bought for leasing and certain second-hand or connected-party purchases generally do not qualify, though other capital allowances may still apply.
Can TaxDigit help if I am not based in Guildford?
Yes. We advise on full expensing and capital allowances for clients UK-wide, remotely and from our Guildford office.