How do I claim the first year allowance on business assets?
Answered 11 March 2026
Based on the sources gathered, I can provide a structured answer, though the available materials do not contain the full text of CAA 2001 ss.39–52 (the core claiming provisions). Here is what the sources do establish:
What the law says
First-year allowances (FYAs) for plant and machinery are governed by Part 2 of the Capital Allowances Act 2001 (CAA 2001). The statutory framework works as follows:
-
Section 39 of CAA 2001 lists the specific provisions under which expenditure can qualify as "first-year qualifying expenditure" — FYAs are only available for certain categories of qualifying expenditure, not all plant and machinery spending.
-
Section 46(2) of CAA 2001 sets out general exclusions that can prevent expenditure from qualifying for FYAs (e.g. ships and railway assets were formerly excluded, but those exclusions were removed for expenditure incurred on or after 1 April 2013).
-
Section 52(3) of CAA 2001 contains a table specifying the rate of FYA applicable to each category of qualifying expenditure. For example:
-
The super-deduction (companies only, expenditure 1 April 2021–31 March 2023): 130% for main rate plant/machinery; 50% for special rate expenditure.
-
Full expensing (companies, post-April 2023): 100% for qualifying expenditure.
-
Ring fence trade expenditure (s.45F): 100%.
-
FYAs are not available for sideways loss relief purposes — a loss derived from a FYA or annual investment allowance cannot be relieved sideways by an individual.
-
A first-year allowance is defined as an allowance "within the meaning of Chapter 5 of Part 2 of CAA 2001" in relation to expenditure on the provision of plant or machinery.
HMRC guidance / practice
HMRC provides the following practical guidance on claiming FYAs:
- HMRC has published a Capital Allowances Manual covering "definition of capital allowances, how allowances are made and how to claim".
- HMRC has produced recorded webinars on:
- Full expensing and the 50% first-year allowance, covering qualifying conditions, exclusions, and what happens on disposal of an asset.
- Super-deduction, covering qualifying expenditure, exclusions, HMRC's online eligibility tool, and how to claim.
- Capital allowances and vehicles for the self-employed, covering qualifying expenditure, pools and rates.
⚠️ Important limitation
The available sources do not contain the full text of CAA 2001 ss.50–52 (the specific provisions on how to make a FYA claim in a tax return) or the detailed HMRC guidance pages on the mechanics of claiming. In practice, FYAs are claimed through:
- The capital allowances pages of your Self Assessment tax return (SA100 supplementary pages for the self-employed) or
- The CT600 corporation tax return (with the capital allowances computation attached).
For the full procedural detail, you should consult:
- HMRC's Capital Allowances Manual (CA) — available at gov.uk
- HMRC's guidance page: "Claim capital allowances" at gov.uk/capital-allowances
Citation sources
Watch a recorded webinar about capital allowances — full expensing and 50% first year allowances. This webinar will provide an overview of full expensing and the 50% first year allowance. It will give an example to show how the rules are applied in practice. You will learn about: the qualifying conditions the exclusions what happens when you dispose of an asset for which you claimed full expensing or the 50% first year allowance
Part 5 Group relief Chapter 6 Equity holders and profits or assets available for distribution Equity holders Use of relevant company's assets 159 1 Subsection (2) applies if— a a person (“P”) has, directly or indirectly, provided new consideration for any shares or securities in the relevant company, b assets of the relevant company are used by P for the purposes of a trade carried on by P or are used by a person connected with P for the purposes of a trade carried on by that connected person, a
PART 1 Income Tax, Corporation Tax and Capital Gains Tax CHAPTER 5 Other provisions Capital allowances First-year allowance to be available for ships and railway assets 70 1 In section 46(2) of CAA 2001 (general exclusions from first-year allowance), omit— a general exclusion 3 (ships), and b general exclusion 4 (railway assets), and the italicised headings preceding them. 2 The amendments made by this section have effect for expenditure incurred on or after 1 April 2013.
Capital Allowances Definition of capital allowances, how allowances are made and how to claim. Capital Gains Manual What is a capital gain or a capital loss and how to work out the tax due after the sale of an asset. CEP — Civil evasion penalties for Customs, Excise and VAT Guidance for HMRC officers who investigate and charge penalties for conduct that involves dishonesty for the purpose of evading Customs Duty, excise duty or VAT. Child Benefit Technical Manual The law relating to claims an
Watch a recorded webinar about capital allowances and vehicles. You will learn about: the annual Self Assessment programme covering the rules for cars qualifying expenditure pools and rates vehicle hire purchase
Part 6 Oil Corporation tax Capital allowances: plant and machinery for use in ring fence trade 108 1 In section 52(3) of CAA 2001 (amount of first-year allowances), for the two entries in the table relating to section 45F substitute— Expenditure qualifying under section 45F (expenditure for use wholly in a ring fence trade) 100% . 2 The amendment made by subsection (1) has effect in relation to expenditure incurred on or after 12 March 2008.
Part 4 Loss relief Chapter 2 Trade losses Restrictions on sideways relief for certain capital allowances First-year allowances and annual investment allowances : introduction 76 Sideways relief is not available to an individual for so much of a loss as derives from an annual investment allowance or a first-year allowance under Part 2 of CAA 2001 if either section 77 or 78 applies.
Watch a recorded webinar about super-deduction first-year capital allowance. This recording is an overview of the super-deduction capital allowance. You will find out: what expenditure qualifies what exclusions may apply how to use HMRC’s new online tool to check eligibility how to claim the super-deduction relief
PART 1 Income tax, corporation tax and capital gains tax Capital allowances: super-deductions etc Super-deductions and other temporary first-year allowances 9 1 Part 2 of CAA 2001 has effect as if— a in section 39 (first-year allowances available for certain types of qualifying expenditure only) a reference to this section were included in the list of provisions describing first-year qualifying expenditure, and b in the Table in section 52(3) (amount of first-year allowances), at the end there w