What are capital allowances?
The answer is quite simple, they are allowances used to write off the cost of capital assets such as plant and machinery against taxable income.
There are many types of allowances, the main ones are:-
Annual Investment Allowance
Enhanced Capital Allowances
Additions of plant and machinery not included in the 100% list above
Long life assets such as integral features of buildings
So when you buy capital assets for use in your business, you may write off the asset cost against taxable profit. Depending on the type of asset and the time of purchase, the rates above will be used from 01.04.2014