{"componentChunkName":"component---src-templates-tide-templates-kv-2-template-index-tsx","path":"/knowledge/annual-investment-allowance/","result":{"pageContext":{"slug":"annual-investment-allowance","contentful_id":"5YC67af67BFAzNPfJMv5Cg","title":"Annual Investment Allowance (AIA) | Tax Relief Guide UK","metaDescription":"Claim up to £1M in tax relief with the Annual Investment Allowance (AIA). Learn how it works and explore funding with expert support.","isNoindex":false,"seo":{"type":"application/ld+json","contents":{"contents":"{\n  \"@context\": \"https://schema.org\",\n  \"@type\": \"FAQPage\",\n  \"mainEntity\": [\n    {\n      \"@type\": \"Question\",\n      \"name\": \"What is the Annual Investment Allowance limit in 2025?\",\n      \"acceptedAnswer\": {\n        \"@type\": \"Answer\",\n        \"text\": \"As of 2025, the limit is £1,000,000 per year. Always confirm with HMRC or your accountant.\"\n      }\n    },\n    {\n      \"@type\": \"Question\",\n      \"name\": \"Can I still claim AIA if I finance the purchase?\",\n      \"acceptedAnswer\": {\n        \"@type\": \"Answer\",\n        \"text\": \"Yes. You can claim AIA on financed equipment if you are the legal owner and the asset qualifies.\"\n      }\n    },\n    {\n      \"@type\": \"Question\",\n      \"name\": \"What happens if I exceed the £1 million AIA limit?\",\n      \"acceptedAnswer\": {\n        \"@type\": \"Answer\",\n        \"text\": \"Expenditure above the AIA threshold may be claimed using Writing Down Allowances (WDA), usually at 18% or 6% per annum.\"\n      }\n    },\n    {\n      \"@type\": \"Question\",\n      \"name\": \"Is AIA available to startups?\",\n      \"acceptedAnswer\": {\n        \"@type\": \"Answer\",\n        \"text\": \"Yes, AIA is available to startups and SMEs investing in eligible capital assets.\"\n      }\n    }\n  ]\n}\n{\n  \"@context\": \"https://schema.org\",\n  \"@type\": \"Article\",\n  \"author\": {\n    \"@type\": \"Person\",\n    \"name\": \"Vivek Seda\"\n  },\n  \"headline\": \"Annual Investment Allowance (AIA) – Maximise Your Tax Relief on Business Investments\",\n  \"datePublished\": \"2025-05-13\",\n  \"mainEntityOfPage\": {\n    \"@type\": \"WebPage\",\n    \"@id\": \"https://www.fundingoptions.com/annual-investment-allowance/\"\n  },\n  \"aggregateRating\": {\n    \"@type\": \"AggregateRating\",\n    \"ratingValue\": \"4.8\",\n    \"reviewCount\": \"1323\"\n  }\n}\n"}},"hero":{"title":"Annual Investment Allowance (AIA): maximise your tax relief on business investments","description":{"raw":"{\"data\":{},\"content\":[{\"data\":{},\"content\":[{\"data\":{},\"marks\":[],\"value\":\"The Annual Investment Allowance (AIA) is a powerful tax relief that lets UK businesses deduct the full value of qualifying assets from their profits — up to a limit of £1 million per year. 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significantly.\",\"marks\":[],\"data\":{}}]},{\"nodeType\":\"paragraph\",\"data\":{},\"content\":[{\"nodeType\":\"text\",\"value\":\"Example:\",\"marks\":[{\"type\":\"bold\"}],\"data\":{}},{\"nodeType\":\"text\",\"value\":\"\\n If you buy a piece of machinery for £100,000, and you're a limited company, you could reduce your taxable profits by the same amount — potentially saving £25,000 in tax (assuming 25% Corporation Tax).\",\"marks\":[],\"data\":{}}]}]}"}}],"expandedAccordionItems":[{"id":"f7aef0f1-c663-5cc7-a260-6481cdb4e1bc"},{"id":"3d6ed9cc-efc0-5081-9205-605a5482ebfa"},{"id":"f63968c7-00f9-599b-80d8-b1434bcfadbe"}]},"sys":{"contentType":{"sys":{"id":"templatesV2SectionAccordionAndForm"}}}},{"sys":{"contentType":{"sys":{"id":"templatesV2SectionHowDoesItWork"}}}},{"title":"What assets are eligible for the annual investment allowance?","descriptionCards":[{"title":"Office 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conditioning\",\"nodeType\":\"text\"}],\"nodeType\":\"paragraph\"}],\"nodeType\":\"document\"}"}},{"title":"Integral features","icon":"Computer and Mobile phone","description":{"raw":"{\"nodeType\":\"document\",\"data\":{},\"content\":[{\"nodeType\":\"paragraph\",\"data\":{},\"content\":[{\"nodeType\":\"text\",\"value\":\"Integral features like heating, electrical systems, water systems, lifts, escalators and lighting systems\",\"marks\":[],\"data\":{}}]},{\"nodeType\":\"paragraph\",\"data\":{},\"content\":[{\"nodeType\":\"text\",\"value\":\"\",\"marks\":[],\"data\":{}}]}]}"}},{"title":"CCTV","icon":"Plant vase","description":{"raw":"{\"data\":{},\"content\":[{\"data\":{},\"content\":[{\"data\":{},\"marks\":[],\"value\":\"CCTV systems and fire alarms\",\"nodeType\":\"text\"}],\"nodeType\":\"paragraph\"},{\"data\":{},\"content\":[{\"data\":{},\"marks\":[],\"value\":\"\",\"nodeType\":\"text\"}],\"nodeType\":\"paragraph\"}],\"nodeType\":\"document\"}"}},{"title":"Company vehicles (excluding cars)","icon":"Hand holding coins","description":{"raw":"{\"data\":{},\"content\":[{\"data\":{},\"content\":[{\"data\":{},\"marks\":[],\"value\":\"\",\"nodeType\":\"text\"},{\"data\":{\"uri\":\"https://www.fundingoptions.com/knowledge/van-leasing-van-finance/\"},\"content\":[{\"data\":{},\"marks\":[{\"type\":\"underline\"}],\"value\":\"Vans\",\"nodeType\":\"text\"}],\"nodeType\":\"hyperlink\"},{\"data\":{},\"marks\":[],\"value\":\"/ lorries, tractors and other agricultural machinery\",\"nodeType\":\"text\"}],\"nodeType\":\"paragraph\"}],\"nodeType\":\"document\"}"}}],"sys":{"contentType":{"sys":{"id":"templatesV2SectionFinancialProductInfo"}}}},{"title":"Estimate your costs today","description":"If you're ready to take your business to the next level, use our business loans calculator to get an idea of what you can afford.","calculatorType":"Business loans","sys":{"contentType":{"sys":{"id":"templatesV2SectionCalculator"}}}},{"sys":{"contentType":{"sys":{"id":"templatesV2SectionAccordion"}}},"title":"Learn more about Annual Investment Allowance","accordion":{"accordionItem":[{"id":"948298aa-a82d-5110-9387-5586e29c712e","label":"What is the Annual Investment Allowance limit in 2025?","content":{"raw":"{\"nodeType\":\"document\",\"data\":{},\"content\":[{\"nodeType\":\"paragraph\",\"data\":{},\"content\":[{\"nodeType\":\"text\",\"value\":\"As of 2025, the limit is £1,000,000 per year. This may change depending on government policy, so always check with HMRC or your accountant.\",\"marks\":[],\"data\":{}}]}]}"}},{"id":"b4a53980-e692-5f69-9b4c-5f58646e2055","label":"Can I still claim AIA if I finance the purchase?","content":{"raw":"{\"nodeType\":\"document\",\"data\":{},\"content\":[{\"nodeType\":\"paragraph\",\"data\":{},\"content\":[{\"nodeType\":\"text\",\"value\":\"Yes. You can claim AIA on financed equipment if you’re the legal owner and the asset qualifies.\",\"marks\":[],\"data\":{}}]}]}"}},{"id":"ef5ed586-e96e-50d1-9c86-ae4f86076c63","label":"What happens if I exceed the £1 million AIA limit?","content":{"raw":"{\"nodeType\":\"document\",\"data\":{},\"content\":[{\"nodeType\":\"paragraph\",\"data\":{},\"content\":[{\"nodeType\":\"text\",\"value\":\"Any expenditure above the AIA limit may be claimed using Writing Down Allowances (WDA), but at a lower rate.\",\"marks\":[],\"data\":{}}]}]}"}},{"id":"03437ebc-8c46-5259-b772-1b05cc96076f","label":"Using hire purchase to access the super-deduction","content":{"raw":"{\"nodeType\":\"document\",\"data\":{},\"content\":[{\"nodeType\":\"paragraph\",\"data\":{},\"content\":[{\"nodeType\":\"text\",\"value\":\"Fortunately, hire purchase agreements are allowed under the super-deduction rules, and this presents an opportunity for businesses to use hire purchases to access the scheme. As part of the budget announced on 3 March 2021, the government introduced new temporary first-year allowances, including a 130% super-deduction, which will take effect from 1 April 2021 to 31 March 2023.\",\"marks\":[],\"data\":{}}]},{\"nodeType\":\"paragraph\",\"data\":{},\"content\":[{\"nodeType\":\"text\",\"value\":\"Suppose you buy an asset at the value of £100k. Usually, a Writing-Down Allowance of 18% would allow you to save £8,524 over three years. However, the relief is limited to the first year and equates to 130% with the super-deduction. This will leave you with a return of £24,700 on the £100k asset (+£16,176).\",\"marks\":[],\"data\":{}}]},{\"nodeType\":\"paragraph\",\"data\":{},\"content\":[{\"nodeType\":\"text\",\"value\":\"The super-deduction is structured in a similar way to the annual investment allowance. \",\"marks\":[],\"data\":{}}]},{\"nodeType\":\"paragraph\",\"data\":{},\"content\":[{\"nodeType\":\"text\",\"value\":\"For example, 4yrs 5% hire purchase from the lender. The interest on a £100k hire purchase agreement over the period would be £10,299\",\"marks\":[],\"data\":{}}]},{\"nodeType\":\"paragraph\",\"data\":{},\"content\":[{\"nodeType\":\"text\",\"value\":\"Hence, the £24,700 tax relief from the super deduction is enough to cover the interest on the loan twice over. Thus, the first year is essentially free.\",\"marks\":[],\"data\":{}}]},{\"nodeType\":\"paragraph\",\"data\":{},\"content\":[{\"nodeType\":\"text\",\"value\":\"Companies can claim 130% of the cost of the introductory rate for plants and machinery, except for cars, in the tax year in which the assets are bought. To qualify:\",\"marks\":[],\"data\":{}}]},{\"nodeType\":\"unordered-list\",\"data\":{},\"content\":[{\"nodeType\":\"list-item\",\"data\":{},\"content\":[{\"nodeType\":\"paragraph\",\"data\":{},\"content\":[{\"nodeType\":\"text\",\"value\":\"The expenditure has to have been incurred on or after 1 April 2021, and before 1 April 2023 and must not come from a contract entered into before 3 March 2021\",\"marks\":[],\"data\":{}}]}]},{\"nodeType\":\"list-item\",\"data\":{},\"content\":[{\"nodeType\":\"paragraph\",\"data\":{},\"content\":[{\"nodeType\":\"text\",\"value\":\"The asset must be new. \",\"marks\":[],\"data\":{}}]}]},{\"nodeType\":\"list-item\",\"data\":{},\"content\":[{\"nodeType\":\"paragraph\",\"data\":{},\"content\":[{\"nodeType\":\"text\",\"value\":\"It must not be provided for leasing (unless the lease is of background plant or machinery within a building)\",\"marks\":[],\"data\":{}}]}]}]},{\"nodeType\":\"paragraph\",\"data\":{},\"content\":[{\"nodeType\":\"text\",\"value\":\"\",\"marks\":[],\"data\":{}}]}]}"}},{"id":"4b3d0138-2ea8-5c4a-8940-21226f4a1ca6","label":"What assets does the super-deduction include?","content":{"raw":"{\"nodeType\":\"document\",\"data\":{},\"content\":[{\"nodeType\":\"paragraph\",\"data\":{},\"content\":[{\"nodeType\":\"text\",\"value\":\"The super-deduction is valid for the following qualifying assets:\",\"marks\":[],\"data\":{}}]},{\"nodeType\":\"unordered-list\",\"data\":{},\"content\":[{\"nodeType\":\"list-item\",\"data\":{},\"content\":[{\"nodeType\":\"paragraph\",\"data\":{},\"content\":[{\"nodeType\":\"text\",\"value\":\"IT hardware and software \",\"marks\":[],\"data\":{}}]}]},{\"nodeType\":\"list-item\",\"data\":{},\"content\":[{\"nodeType\":\"paragraph\",\"data\":{},\"content\":[{\"nodeType\":\"text\",\"value\":\"Office furniture \",\"marks\":[],\"data\":{}}]}]},{\"nodeType\":\"list-item\",\"data\":{},\"content\":[{\"nodeType\":\"paragraph\",\"data\":{},\"content\":[{\"nodeType\":\"text\",\"value\":\"Trucks and vans (not cars)\",\"marks\":[],\"data\":{}}]}]},{\"nodeType\":\"list-item\",\"data\":{},\"content\":[{\"nodeType\":\"paragraph\",\"data\":{},\"content\":[{\"nodeType\":\"text\",\"value\":\"Solar panels acquired through \",\"marks\":[],\"data\":{}},{\"nodeType\":\"hyperlink\",\"data\":{\"uri\":\"https://www.fundingoptions.com/knowledge/green-sustainable-finance/\"},\"content\":[{\"nodeType\":\"text\",\"value\":\"green finance\",\"marks\":[{\"type\":\"underline\"}],\"data\":{}}]},{\"nodeType\":\"text\",\"value\":\"\",\"marks\":[],\"data\":{}}]}]},{\"nodeType\":\"list-item\",\"data\":{},\"content\":[{\"nodeType\":\"paragraph\",\"data\":{},\"content\":[{\"nodeType\":\"text\",\"value\":\"\",\"marks\":[],\"data\":{}},{\"nodeType\":\"hyperlink\",\"data\":{\"uri\":\"https://www.fundingoptions.com/knowledge/agricultural-asset-finance-tractor-hire/\"},\"content\":[{\"nodeType\":\"text\",\"value\":\"Agricultural machinery \",\"marks\":[{\"type\":\"underline\"}],\"data\":{}}]},{\"nodeType\":\"text\",\"value\":\"\",\"marks\":[],\"data\":{}}]}]},{\"nodeType\":\"list-item\",\"data\":{},\"content\":[{\"nodeType\":\"paragraph\",\"data\":{},\"content\":[{\"nodeType\":\"text\",\"value\":\"Electric vehicle charge points \",\"marks\":[],\"data\":{}}]}]},{\"nodeType\":\"list-item\",\"data\":{},\"content\":[{\"nodeType\":\"paragraph\",\"data\":{},\"content\":[{\"nodeType\":\"text\",\"value\":\"Construction plant and machinery (including cranes and diggers)\",\"marks\":[],\"data\":{}}]}]},{\"nodeType\":\"list-item\",\"data\":{},\"content\":[{\"nodeType\":\"paragraph\",\"data\":{},\"content\":[{\"nodeType\":\"text\",\"value\":\"Refrigeration units \",\"marks\":[],\"data\":{}}]}]},{\"nodeType\":\"list-item\",\"data\":{},\"content\":[{\"nodeType\":\"paragraph\",\"data\":{},\"content\":[{\"nodeType\":\"text\",\"value\":\"Computer numerical control (CNC) and other manufacturing and engineering equipment \",\"marks\":[],\"data\":{}}]}]},{\"nodeType\":\"list-item\",\"data\":{},\"content\":[{\"nodeType\":\"paragraph\",\"data\":{},\"content\":[{\"nodeType\":\"text\",\"value\":\"Compressors\",\"marks\":[],\"data\":{}}]}]}]},{\"nodeType\":\"paragraph\",\"data\":{},\"content\":[{\"nodeType\":\"text\",\"value\":\"The AIA enables businesses to claim back 100% of the cost of qualifying plant and machinery in the year of acquisition. \",\"marks\":[],\"data\":{}}]}]}"}},{"id":"6a6c0bd1-f35e-5dad-a78f-d6a24e0e4e50","label":"What are capital allowances for cars?","content":{"raw":"{\"nodeType\":\"document\",\"data\":{},\"content\":[{\"nodeType\":\"paragraph\",\"data\":{},\"content\":[{\"nodeType\":\"text\",\"value\":\"It is essential to know that capital allowances are calculated by evaluating the expenditure on the actual car and not the purchase price, as is the case with benefit-in-kind. Capital allowances are now available where simplified expenses are claimed.\",\"marks\":[],\"data\":{}}]},{\"nodeType\":\"heading-3\",\"data\":{},\"content\":[{\"nodeType\":\"text\",\"value\":\"Cars with co2 emissions\",\"marks\":[],\"data\":{}}]},{\"nodeType\":\"paragraph\",\"data\":{},\"content\":[{\"nodeType\":\"text\",\"value\":\"The government uses capital allowances to accelerate the transition to more environmentally friendly cars. New and unused vehicles with zero CO2 emissions can avail of the total 100% first-year allowance. Cars with CO2 emissions below 50g/km can claim an 18% writing down allowance in the main l pool. Vehicles with higher CO2 emissions will be placed in the special rate pool (6% rate of capital allowances). Any car that you use privately will be placed in a separate pool as allowances will be restricted by the amount of private use.\",\"marks\":[],\"data\":{}}]}]}"}},{"id":"4364426d-8bce-5296-aeac-85fe9ee40c5c","label":"What is the small pools allowance?","content":{"raw":"{\"nodeType\":\"document\",\"data\":{},\"content\":[{\"nodeType\":\"paragraph\",\"data\":{},\"content\":[{\"nodeType\":\"text\",\"value\":\"Businesses which are not using the cash basis can claim capital allowances for capital items such as plant and machinery, tools and equipment. If you have a balance of £1,000 or less in your main (general) pool or special rate pool, you can claim capital allowances (called the small pools allowance) on the total amount of the asset. You cannot claim the small pools allowance and the writing down allowances.\",\"marks\":[],\"data\":{}}]},{\"nodeType\":\"paragraph\",\"data\":{},\"content\":[{\"nodeType\":\"text\",\"value\":\"What items fall into the special rate pool?\",\"marks\":[],\"data\":{}}]},{\"nodeType\":\"paragraph\",\"data\":{},\"content\":[{\"nodeType\":\"text\",\"value\":\"The main items in this pool will be long-life assets, integral features or cars with higher carbon dioxide (CO2) emissions.\",\"marks\":[],\"data\":{}}]},{\"nodeType\":\"paragraph\",\"data\":{},\"content\":[{\"nodeType\":\"text\",\"value\":\"These items only get a writing down allowance at 6% each year, but except for cars, you should be able to claim the annual investment allowance first before using the special rate pool.\",\"marks\":[],\"data\":{}}]},{\"nodeType\":\"paragraph\",\"data\":{},\"content\":[{\"nodeType\":\"text\",\"value\":\"Check your asset finance funding options with our 3-minute eligibility checker on this page – it’s free and there’s no obligation!\",\"marks\":[],\"data\":{}}]}]}"}},{"id":"879e4a96-9a6d-59c0-990b-a787b8f44540","label":"Is AIA available to startups?","content":{"raw":"{\"nodeType\":\"document\",\"data\":{},\"content\":[{\"nodeType\":\"paragraph\",\"data\":{},\"content\":[{\"nodeType\":\"text\",\"value\":\"Yes. Startups and SMEs can claim AIA as long as they invest in qualifying capital assets.\",\"marks\":[],\"data\":{}}]}]}"}}],"expandedAccordionItems":[{"id":"948298aa-a82d-5110-9387-5586e29c712e"},{"id":"b4a53980-e692-5f69-9b4c-5f58646e2055"},{"id":"ef5ed586-e96e-50d1-9c86-ae4f86076c63"},{"id":"879e4a96-9a6d-59c0-990b-a787b8f44540"}]}},{"sys":{"contentType":{"sys":{"id":"templatesV2SectionDisclaimer"}}},"disclaimer":{"raw":"{\"nodeType\":\"document\",\"data\":{},\"content\":[{\"nodeType\":\"paragraph\",\"data\":{},\"content\":[{\"nodeType\":\"text\",\"value\":\"Please note that the information above is not intended to be financial advice. You should seek independent financial advice before making any decisions about your financial future.\",\"marks\":[{\"type\":\"italic\"}],\"data\":{}}]},{\"nodeType\":\"paragraph\",\"data\":{},\"content\":[{\"nodeType\":\"text\",\"value\":\"It’s important to remember that all loans and credit agreements come with risks. These risks include non-payment and late-payment of the agreed repayment plan, which could affect your business credit score and impact your ability to find future funding. Always read the terms and conditions of every loan or credit agreement before you proceed. Contact us for support if you ever face difficulties making your repayments.\",\"marks\":[{\"type\":\"italic\"}],\"data\":{}}]},{\"nodeType\":\"paragraph\",\"data\":{},\"content\":[{\"nodeType\":\"text\",\"value\":\"Funding Options, now part of Tide, helps UK firms access business finance, working directly with businesses and their trusted advisors. Funding Options are a credit broker and do not provide loans directly. All finance and quotes are subject to status and income. Applicants must be aged 18 and over and terms and conditions apply. Guarantees and Indemnities may be required. Funding Options can introduce applicants to a number of providers based on the applicants' circumstances and creditworthiness. Funding Options will receive a commission or finder’s fee for effecting such finance introductions.\",\"marks\":[{\"type\":\"italic\"}],\"data\":{}}]},{\"nodeType\":\"paragraph\",\"data\":{},\"content\":[{\"nodeType\":\"text\",\"value\":\"\\n\",\"marks\":[],\"data\":{}}]}]}"}}],"author":{"name":"Joe Morley","jobTitle":"Business Finance Lead","slug":"joe-morley","shortBio":{"shortBio":"Joe has been helping UK businesses secure the funding they need since 2015. Over the years, he’s supported hundreds of SMEs in accessing millions of pounds for everything from purchasing essential assets to unlocking working capital for day-to-day operations. As Head of Sales at Funding Options, Joe leads a large team of expert Business Finance Specialists dedicated to finding the right solution for every customer. His goal is simple - to make securing finance straightforward, stress free, and tailored to each business’s needs."},"image":{"title":"Joe Morley","gatsbyImageData":{"images":{"sources":[{"srcSet":"https://images.ctfassets.net/7y9qslt4dryp/7fM6foUkI5z6EJqFGwRDz2/b91af08b8550ad38dc3c63069a6ef2eb/Joe_Morley.png?w=32&h=32&q=50&fm=webp 32w,\nhttps://images.ctfassets.net/7y9qslt4dryp/7fM6foUkI5z6EJqFGwRDz2/b91af08b8550ad38dc3c63069a6ef2eb/Joe_Morley.png?w=64&h=64&q=50&fm=webp 64w,\nhttps://images.ctfassets.net/7y9qslt4dryp/7fM6foUkI5z6EJqFGwRDz2/b91af08b8550ad38dc3c63069a6ef2eb/Joe_Morley.png?w=128&h=128&q=50&fm=webp 128w","sizes":"(min-width: 128px) 128px, 100vw","type":"image/webp"}],"fallback":{"src":"https://images.ctfassets.net/7y9qslt4dryp/7fM6foUkI5z6EJqFGwRDz2/b91af08b8550ad38dc3c63069a6ef2eb/Joe_Morley.png?w=128&h=128&q=50&fm=png","srcSet":"https://images.ctfassets.net/7y9qslt4dryp/7fM6foUkI5z6EJqFGwRDz2/b91af08b8550ad38dc3c63069a6ef2eb/Joe_Morley.png?w=32&h=32&q=50&fm=png 32w,\nhttps://images.ctfassets.net/7y9qslt4dryp/7fM6foUkI5z6EJqFGwRDz2/b91af08b8550ad38dc3c63069a6ef2eb/Joe_Morley.png?w=64&h=64&q=50&fm=png 64w,\nhttps://images.ctfassets.net/7y9qslt4dryp/7fM6foUkI5z6EJqFGwRDz2/b91af08b8550ad38dc3c63069a6ef2eb/Joe_Morley.png?w=128&h=128&q=50&fm=png 128w","sizes":"(min-width: 128px) 128px, 100vw"}},"layout":"constrained","width":128,"height":128}}}}},"staticQueryHashes":["1250078025","1659198851","3682024094","3753363658"]}