Answers · UK 2025/26
What is the Annual Investment Allowance for 2026/27?
The Annual Investment Allowance (AIA) is £1,000,000 for 2026/27, allowing immediate 100% tax relief on qualifying capital expenditure.
Full answer
The AIA allows businesses to deduct 100% of the cost of qualifying plant and machinery up to £1,000,000 in the year of purchase. Items that qualify include manufacturing equipment, tools, computers, commercial vehicles (NOT cars), fixtures, integral features of buildings (electrical systems, plumbing). Cars are excluded from AIA but qualify for writing down allowances at 18% (main pool) or 6% (special rate, for cars with CO2 over 50g/km). Expenditure exceeding the AIA limit goes into the writing down allowance pools at 18% or 6%. A company selling assets within the AIA period may face a balancing charge. The AIA has been permanently set at £1,000,000 since April 2023.
This answer is informational only and does not constitute financial, tax or legal advice. Figures are for the 2025/26 UK tax year. See our methodology and sources.