Capital allowances for tradespeople: claiming for a van, tools and equipment
Updated 12 November 2026 · 2026/27 tax year
A new van or a set of tools is a big spend, and you can claim it against your tax. How you claim depends on whether you use the cash basis, and on whether it's a van or a car.
On the cash basis (most sole traders)
Tools, equipment and vans are simply claimed as a cost in the year you pay for them. No capital allowances needed. Bought on finance or leased? Ask your accountant how to claim it, as it depends on the deal.
On traditional accounting
You claim capital allowances instead. The annual investment allowance (AIA) lets you claim the full cost of vans, tools, machinery and equipment in the year you buy them, up to £1 million a year, which covers almost every trade business.
Cars are different
- Cars can't be claimed in full and don't get the AIA, on either basis
- Most cars go into a pool claimed at 14% a year (from April 2026, down from 18%), or 6% for cars over 50g/km of CO2
- New zero-emission cars can get a 100% first year allowance
- Claim only the business share if you use the car privately too
Mileage instead
If you claim 45p a mile for a vehicle, you can't also claim capital allowances or the cost of buying it. Pick one method per vehicle and stick with it.
Selling or scrapping
If you sell a van or tools you've claimed for, what you get for them counts as income (or a balancing charge on traditional accounting). Part-exchanging a van counts as selling it.
Using it partly for yourself
If the van is used for personal trips too, only claim the business share, and only that share of the sale price counts when you sell.
This guide is general information, not tax advice. Check HMRC's guidance or ask an accountant about your own situation.