Tax relief · England, Wales, Scotland, Northern Ireland
Annual Investment Allowance (AIA)
Deduct the full cost of most machinery and equipment (tractors, kit, many fixtures) from your profits in the year you buy it, so you pay less tax.
- From
- HMRC
- How much
- 100% of the cost, up to £1 million of spending a year.
- Who can apply
- Sole traders, partnerships made up only of individuals, and limited companies. Not cars.
What you’ll need
- Invoices for the machinery or equipment
- Your accounts
How to apply
- Claim on your Self Assessment or Company Tax Return
- Ask your accountant to include it in the capital allowances
Not available for cars, things you owned before using them in the business, or gifts. Mixed partnerships (with a company as partner) can't claim.
Similar schemes
- Growth Guarantee Scheme (government-backed business lending) OpenBritish Business Bank, through accredited lendersThe government guarantees part of a loan, overdraft, asset finance or invoice finance from an accredited lender, which can help a farm business borrow when it might not otherwise get finance.
- Scottish Broadband Voucher Scheme OpenScottish Government (R100 programme) · Closes 20 November 2026A voucher towards getting a faster broadband connection installed at a home or business with slow broadband and no faster connection planned.
- Sustainable Agriculture Loan Scheme OpenDevelopment Bank of Wales, for the Welsh GovernmentLow-interest loans for on-farm renewable energy, energy efficiency and storage, slurry and nutrient management, and farm infrastructure and equipment.
- Workplace Charging Scheme (EV chargepoints) OpenOffice for Zero Emission Vehicles (OZEV), run by DVLA · Closes 31 March 2027A voucher towards buying and fitting electric vehicle chargepoints for staff or farm fleet vehicles. You get a voucher code and give it to an authorised installer, who claims the money.
- 40% first-year allowance Open all yearHMRCDeduct 40% of the cost of new main-rate plant and machinery from profits in the first year, with the rest claimed over later years.
- Farmers' averaging of profits Open all yearHMRCSole-trader and partnership farmers can average taxable profits over 2 or 5 years, which smooths out good and bad years and can cut the tax bill.
Checked against the official pages on 29 October 2026. Sources: 1. Always read the official page before you apply.