Why it matters
They can affect the tax cost and timing of investment in equipment and other qualifying assets. The relevant allowance depends on the asset, the business, its use and the period. Accounting depreciation and the tax deduction are separate calculations. Keep purchase invoices, ownership information and records of private use or disposals so a claim can be assessed properly.
A practical example
A company buys a machine that will be used for several years. Its accounts may spread the cost through depreciation, while the tax calculation considers the capital allowances available under the applicable rules. The deductions need not match the annual accounting charge.
A common misunderstanding
Not every asset qualifies for the same immediate deduction. Cars, property-related expenditure, leased assets and mixed business/private use can need different treatment. A tax allowance also does not refund the entire purchase price. The commercial need and cash cost still matter.
Sources & further reading
General information for UK readers, updated 3 November 2026. Examples are illustrative. Tax treatment depends on the facts and current rules; seek advice before making a decision.