Annual Investment Allowance (AIA) Calculator
The Annual Investment Allowance lets UK businesses deduct up to £1,000,000 of qualifying capital expenditure from taxable profits in the year of purchase – a powerful way to reduce your Corporation Tax bill.
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Many business owners don't realise that the timing of capital purchases can dramatically affect their tax bill. Buying equipment, machinery, or commercial vehicles before your year end lets you claim AIA immediately, rather than spreading the deduction over many years through Writing Down Allowances.
It's also a common mistake to assume all business assets qualify. Cars are excluded from AIA entirely and must be claimed through the main or special rate pool at 18% or 6% per year. Integral features of buildings – such as electrical systems, lifts, and heating – do qualify, but are often overlooked.
Enter your expected capital expenditure below to see how AIA and Writing Down Allowances reduce your Corporation Tax. The calculator accounts for associated companies, which share the £1m AIA limit between them.
Annual Investment Allowance Calculator
Plant, machinery, equipment, vans, tools
Cars, integral features above AIA limit
Your Capital Allowance Relief
AIA Claimed
£50,000
of £1,000,000 limit
WDA on Non-AIA Assets
£0
Year 1 at 18%
Total Deductions
£50,000
Taxable Profit After Relief
£150,000
Corporation Tax
£36,000
Effective rate: 18.0%
Tax Saving from AIA/WDA
£13,250
Tax Without Capital Allowances
£49,250
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