The most important thing to be aware of regarding capital allowances is that every business is now entitled to an Annual Investment Allowance of £50,000. Basically this means that you can spend up to £50,000 a year on qualifying expenditure and claim the whole lot against tax. In fact the only exception to this is cars as they are subject to special rules. However, if your accounting period straddles 1st April 2008 (or 6th April 2008 for sole traders) the AIA is restricted to the time-apportioned amount.
An improvement to the previous regime is that the AIA is also available for landlords. However, unless it is a commercial property used for business purposes or a furnished holiday letting, you are only allowed to claim it for assets used by you to run your property business, such as a computer or office furniture. Cars are not included in the AIA so you cannot claim for these. You also cannot claim the AIA for anything inside the property itself such as carpets, fridges or furniture that are for the use of the tenants. These items must either be claimed on the renewals basis or through the 10% annual wear and tear allowance.
