Capital allowances in 2026: what changed, and how to claim.
Two changes reach company tax returns this year. The main pool's writing-down allowance fell from 18% to 14% on 1 April 2026, and a new 40% first-year allowance covers new main-rate plant and machinery bought from 1 January 2026, including assets bought for leasing. Clients Assistant works out the allowances from your pools and purchases, and fills in the CT600's boxes.
What changed in 2026
| Change | From | What it means |
|---|---|---|
| Main pool writing-down allowance cut from 18% to 14% | 1 April 2026 for companies (6 April 2026 for Income Tax) | Each year's allowance on the main pool is smaller, so relief on the pool comes more slowly. The special rate pool stays at 6%. |
| New 40% first-year allowance | Spending from 1 January 2026 | 40% of the cost of new and unused main-rate plant and machinery, not cars, in the year it's bought. It covers assets bought for leasing, which full expensing doesn't, but not leasing overseas. The other 60% gets writing-down allowances from the next period. |
| 100% allowances on zero-emission cars and charge-points extended | Until 31 March 2027 for companies (5 April 2027 for Income Tax) | New zero-emission cars and equipment for electric vehicle charge-points can still be written off in full in the year they're bought. |
If your year spans 1 April 2026: the hybrid rate
A company whose accounting period includes 1 April 2026 uses a hybrid main pool rate: 18% and 14% weighted by the days before and from that date, rounded up to two decimal places. HMRC's example is a year from 1 January to 31 December 2026: 90 days at 18% and 275 days at 14% give 14.99%.
| Twelve-month year ending | Days at 18% | Days at 14% | Main pool rate |
|---|---|---|---|
| 31 March 2026 | 365 | 0 | 18% |
| 30 June 2026 | 274 | 91 | 17.01% |
| 30 September 2026 | 182 | 183 | 16.00% |
| 31 December 2026 | 90 | 275 | 14.99% |
| 31 March 2027 | 0 | 365 | 14% |
For a period shorter than twelve months, the allowance is reduced in proportion as well.
Which allowance for what you buy
For a company, these are the allowances available on each kind of spending. The annual investment allowance (AIA) is £1 million a year for the company, shared within a group and reduced for a shorter period.
| What the company buys | Allowance |
|---|---|
| New plant and machinery: equipment, vans, computers, furniture | The AIA, or full expensing: 100% in the year, with no limit |
| New plant and machinery bought to lease to others | The AIA, or the 40% first-year allowance (spending from 1 January 2026) |
| New special rate assets: integral features, long-life assets, solar panels | The AIA, or the 50% first-year allowance |
| Second-hand plant and machinery | The AIA, then the main pool at 14% or the special rate pool at 6% |
| New zero-emission car | 100% first-year allowance, until 31 March 2027 |
| Any other car | No AIA: 50g/km of CO2 or less to the main pool at 14%, over 50g/km to the special rate pool at 6% |
| Electric vehicle charge-point equipment | 100% first-year allowance, until 31 March 2027 |
| New commercial buildings and structures | Structures and buildings allowance: 3% a year of the qualifying cost |
Full expensing and the 50% allowance are for companies only. When an asset that had full expensing is sold, the whole sale price is taxed as a balancing charge; when an asset that had the AIA is sold, the sale price comes off the pool instead. So where the AIA covers the spending, it's usually the better claim.
Where it goes on the CT600
HMRC asks for capital allowances and balancing charges by type, in boxes 688 to 755 of the CT600, with the qualifying spending in boxes 760 to 775. HMRC's online service has no box yet for the 40% allowance, so until it's updated in April 2027 HMRC asks for:
- the 40% allowance to go in other allowances (box 725, or box 750 for a property business), with the spending in box 760
- for periods starting on or after 1 April 2026, the 100% allowances on zero-emission cars and charge-points to go there too
Clients Assistant puts each figure in the box HMRC asks for, and will use the new boxes once HMRC's service accepts them.
Capital allowances, worked out
Bring in the pools
Enter the main and special rate pools brought forward once. After that, each year's return brings them forward from the last.
Add what you bought and sold
Purchases with their date and type, whether each was new and whether it's for leasing, then sales, scrapped assets and buildings.
See the claim
The most relief available for the period, in the CT600's boxes, with the pools set out in the tax computation sent to HMRC.
What it costs
| Plan | Price | What it covers |
|---|---|---|
| Prepare | Free | Company details and deadlines from Companies House, the tax computation, accounts and CT600 previews, checks against HMRC's rules, deadline reminders |
| One dormant company | £5 + VAT a year | Filing the year's return and accounts for a dormant company |
| One company | £15 + VAT a year | Filing the year's return and accounts for any other company, including charities and CICs |
| Several companies | from £35 + VAT a year | For groups and accountants: bands from 3 to 1,000 companies |
All prices exclude VAT; 20% VAT is added at checkout, so £5 a year is £6.00 including VAT.
Questions people ask
14%. It fell from 18% on 1 April 2026 for companies, and on 6 April 2026 for Income Tax. The special rate pool's rate stays at 6%.
Weight 18% and 14% by the days in the period before and from 1 April 2026, and round up to two decimal places. A year from 1 January to 31 December 2026 gives 14.99%. Clients Assistant works it out from the return's dates.
A permanent first-year allowance of 40% for new and unused main-rate plant and machinery bought from 1 January 2026, not including cars. Unlike full expensing, it covers assets bought for leasing (but not leasing overseas), and unincorporated businesses can claim it. The other 60% gets writing-down allowances from the next period.
Both give 100% in the year of purchase. The AIA is limited to £1 million a year, but when an asset claimed under it is sold, the sale price comes off the pool rather than being taxed straight away. Under full expensing the whole sale price is a balancing charge. Clients Assistant uses the AIA first, and full expensing for spending above the limit.
Until HMRC updates its online service in April 2027, in other allowances: box 725 for a trade, or box 750 for a property business, with the spending in box 760. The 100% allowances on zero-emission cars and charge-points go there too for periods starting on or after 1 April 2026.
Yes. Enter the pools brought forward and the year's purchases, sales and buildings, and it works out the AIA, full expensing, the 40% and 50% allowances, 100% on new electric cars and charge-points, writing-down allowances, balancing charges and the structures and buildings allowance. It fills in the CT600's boxes and carries the pools forward. Short-life asset elections, a trade ending and claiming less than the maximum aren't covered: for those, type the figure for each box.
Preparing the return, capital allowances included, is free. Filing is £5 + VAT a year for a dormant company and £15 + VAT a year for any other company.
Checked against GOV.UK on 17 October 2026. Sources: Capital allowances: new first-year allowance and reducing main rate writing-down allowances; Calculate your hybrid rate of writing down allowance; Claim capital allowances: 40% first-year allowance; Claim capital allowances: full expensing; Capital allowances: extension of first-year allowances for zero-emission cars and chargepoints; Changes and issues affecting the Corporation Tax online service.
Related guides and products
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