Budget updates
If you’re a commercial property owner in the UK, it’s essential to stay up to date with the latest budget updates, particularly when they affect Capital Allowances. These allowances can be essential for your business, reducing tax and improving cash flow. We’ll keep this page updated allowing this to be your go-to resource for the latest in Capital Allowances Budget updates and what it means for you.
Latest Budget update – 26th November 2025
If asked to describe this budget I, along with a lot of others, appear to be using words such as “messy”, “shambles”, “disjointed” or “short sighted” – usually preceded by an expletive!
It undermines businesses and discourages business owners from being business owners. This will lead to reduced revenue to the government and an increase in the number of unemployed people who will not be inspired to be entrepreneurial and set up their own businesses in the future.
Specifically relating to Capital Allowances, the “Main Rate” of tax relief for claiming “Plant & Machinery Allowances” is being reduced from 18% per annum to 14% per annum. Another kick in the teeth for business growth, disincentivizing businesses from investing more than £1,000,000 a year into new buildings, equipment and machinery.
Thankfully, the Annual Investment Allowance figure remains at £1,000,000, which is a slight encouragement, BUT remember you must claim this within two years, or you lose it!
Budget update – November 2023
As the financial landscape shifts with each Budget announcement, we’ve gathered the key points that affect your Capital Allowances claims:
Annual Investment Allowance (AIA) Stability
The AIA remains at £1 million for qualifying expenditure incurred until 31 March 2023. This temporary cap provides significant tax relief for investments in plant and machinery.
Super-deduction and SR Allowance
For expenditures incurred from 1 April 2021 until 31 March 2023, companies can take advantage of the super-deduction, offering 130% first-year relief on qualifying main rate plant and machinery investments. Alongside, a 50% first-year allowance for qualifying special rate assets.
Green investment incentives
The government continues to bolster its commitment to sustainability, with Enhanced Capital Allowances (ECAs) for energy and water-efficient equipment remaining a focus, providing a 100% first-year allowance to support green investments.
Freeports tax sites
Commercial properties within designated Freeports may benefit from enhanced tax reliefs, including enhanced structures and buildings allowances, with certain qualifying investments eligible for 10% relief per annum over a 10-year period.
What these updates mean for you
With these changes, UK commercial property owners have opportunities to make significant savings. Whether you’re planning new purchases or considering upgrades to your existing property, the generous AIA cap and the super-deduction can make a substantial difference to your bottom line.