Tax relief · England, Wales, Scotland, Northern Ireland
40% first-year allowance
Deduct 40% of the cost of new main-rate plant and machinery from profits in the first year, with the rest claimed over later years.
- From
- HMRC
- How much
- 40% of the cost in year one.
- Who can apply
- Businesses buying new, unused main-rate plant or machinery (not cars) on or after 1 January 2026.
- Opens
- 1 January 2026
What you’ll need
- Invoices showing the items were new and unused
How to apply
- Claim on your tax return (ask your accountant)
Most farms will use AIA (100%) first; this matters once AIA is used up. The gov.uk page doesn't clearly say whether sole traders can claim; couldn't confirm.
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.
- Annual Investment Allowance (AIA) Open all yearHMRCDeduct 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.
- 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.