Capital allowances are tax allowances that you can claim on certain purchases and investments you make in your business e.g vans, cars, machines, tools and equipment. Your year end tax bill can be reduced by deducting a proportion of these costs from your taxable profit.
Capital allowances can be claimed on plant and machinery, certain buildings and research and development relevant to your business. The amount depends on what you are claiming for and in some cases the rates differ in the year you make the purchase than in subsequent years.
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