Tools, vans and kit: are you claiming the full tax relief available?

Investing in your business could unlock immediate tax savings.

Many owner-managed businesses invest regularly in tools, vehicles and equipment, but not all are claiming the full tax relief available.

Capital allowances can allow you to deduct up to 100% of qualifying costs in the year of purchase, reducing your tax bill and improving cashflow.

Capital allowances enable businesses to claim tax relief on investments in assets used in the business, such as:

• tools and workshop equipment
• vans and commercial vehicles
• IT equipment and office furniture.

Rather than spreading the cost over several years, generous reliefs mean many businesses can claim the full value upfront.

Limited companies can benefit from Full Expensing, now a permanent feature of the tax system.

This provides:

• 100% first-year relief on qualifying new and unused plant and machinery
• immediate tax relief on a wide range of business purchases.

Key points

• Most vans and commercial vehicles used for business purposes qualify in full.
• Cars do not qualify and instead attract relief based on CO₂ emissions.
• The asset must be new (not second-hand).

This means a purchase such as a new van can deliver full tax relief in the year of investment.

The Annual Investment Allowance (AIA) is available to all business types, including sole traders, partnerships and LLPs.

It offers:

• up to £1,000,000 of tax relief per year
• relief on new or used plant and machinery
• immediate deduction against taxable profits. 

Common qualifying assets include:

• tool storage and specialist equipment
• compressors and diagnostic systems
• IT equipment and office furniture.

Where expenditure exceeds the limit, the remaining balance is still claimable over time.

While the rules are generous, incorrect treatment can reduce the relief available.

Key considerations

• Distinguishing correctly between cars and vans.
• Ensuring assets are used wholly for business.
• Keeping clear records, including invoices and dates of first use.
• Avoiding claiming more than one relief on the same asset.

Why this matters

For many businesses, these purchases are routine — but the tax treatment is often overlooked.

Planning ahead can help you:

• maximise available reliefs
• time investment effectively within the tax year
• turn necessary spending into meaningful tax savings.

Understanding which relief applies — and how to claim it correctly — can make a material difference.

Crowe UK supports businesses by:

• identifying qualifying expenditure
• maximising available capital allowances
• ensuring claims are accurate and compliant.

If you are investing in tools, vehicles or equipment, please get in touch with Crowe UK to ensure you are claiming the full tax relief available.