Annual Investment Allowance Calculator
Calculate the year-1 capital allowance on plant & machinery: £1m AIA, 18%/6% writing down allowances and the full-expensing comparison for companies.
Data verified · July 2026
What is the AIA limit?
£1,000,000 a year, permanently, for all businesses (companies, sole traders, partnerships) on qualifying plant & machinery — cars excluded.
Source: GOV.UK — Annual Investment Allowance (gov.uk/capital-allowances/annual-investment-allowance); work out capital allowances; full expensing guidance. · updated 2026
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Everything about Annual Investment Allowance Calculator
📋Overview+
Compares the two 100% first-year routes on qualifying plant & machinery (2025/26): the £1,000,000 Annual Investment Allowance (all businesses) versus full expensing (companies buying NEW main-rate assets, uncapped, with 50% first-year on special-rate assets) — allocating AIA to special-rate spend first, since it would otherwise only earn 6% a year.
💡 Best practices
- Allocate your AIA to special-rate spend first — main-rate assets fall back to 18% a year, special-rate only 6%.
- Full expensing is companies-only and new-assets-only; sole traders and partnerships rely on the AIA.
- Selling a fully-expensed asset triggers an immediate balancing charge — plan disposals.
🔢 Concrete example
Company buys £1.5m of new main-rate plant: AIA route deducts £1.09m in year 1 (£1m AIA + 18% of the rest), full expensing deducts the whole £1.5m — saving £375,000 of corporation tax at 25%.
📖User guide+
How to use this calculator
- 1
Enter total qualifying expenditure and the special-rate portion (integral features, long-life assets).
- 2
Set whether the buyer is a company and the assets are new.
- 3
Enter your marginal tax rate (25% CT main rate by default).
- 4
Compare both routes and read the year-1 deduction and tax saving.
📚Glossary+
- Annual Investment Allowance
- 100% deduction in year 1 on up to £1,000,000 of qualifying plant & machinery (permanent level). Cars are excluded.
- Full expensing
- Companies deduct 100% of NEW main-rate plant with no cap (permanent since April 2023), plus a 50% first-year allowance on new special-rate assets.
ℹ️Sources & updates+
Last data update
July 5, 2026
Sources and references
GOV.UK — Annual Investment Allowance (gov.uk/capital-allowances/annual-investment-allowance); work out capital allowances; full expensing guidance.
The data in this calculator is updated regularly to reflect the latest official rates. When in doubt, consult the official sources listed above.
FAQ — Annual Investment Allowance Calculator
What is the AIA limit?+
£1,000,000 a year, permanently, for all businesses (companies, sole traders, partnerships) on qualifying plant & machinery — cars excluded.
AIA or full expensing — which is better?+
For companies buying new main-rate assets above £1m, full expensing wins (uncapped 100%). Below £1m the routes are equivalent; for used assets or unincorporated businesses, only the AIA applies.
What happens above the limits?+
Excess main-rate spend earns an 18% writing down allowance per year (reducing balance); special-rate assets (integral features, long-life) only 6% — or a 50% first-year allowance under full expensing.