There are more capital allowance rates in play than most guidance admits, because several allowances introduced for fixed windows are still running off in company pools. This page lists the rates a company will actually meet in a current computation and says which spending each one attaches to.
The writing down rates
The main pool rate is 14% a year on the reducing balance, cut from 18% with effect from April 2026. The special rate pool is 6%, and it holds integral features, long-life assets, thermal insulation, solar panels and cars with higher emissions. Both are reducing-balance rates, so a pool never quite empties: a balance of £1,000 or less in the main or special rate pool can be written off in full as a small pools allowance instead of being written down forever.
The full-relief rates
The annual investment allowance gives 100% on up to £1 million of qualifying plant and machinery in a twelve-month period. Full expensing gives companies 100% on qualifying new main-rate plant and machinery from 1 April 2023 with no annual cap. The 50% first-year allowance gives companies half the cost of new special rate assets in year one, with the balance entering the special rate pool. A 40% first year allowance applies to qualifying plant and machinery purchased after 1 January 2026.
Choosing between them
Where expenditure qualifies for more than one allowance the company chooses, and the choice is not always the largest number. Full expensing has no cap but carries a balancing charge on disposal equal to the full proceeds, where an annual investment allowance claim feeds the ordinary pool mechanics instead. For a company that expects to sell the asset, that difference can outweigh the timing benefit, and it is the sort of thing worth deciding before the return rather than after.
Questions people ask about capital allowance rates
What is the capital allowance rate for the main pool?
14% a year on the reducing balance, reduced from 18% with effect from April 2026.
What is the special rate pool rate?
6% a year on the reducing balance. It holds integral features, long-life assets, thermal insulation, solar panels and higher-emission cars.
Is there still an annual investment allowance?
Yes. It gives 100% relief on up to £1 million of qualifying plant and machinery in a twelve-month period, pro-rated for shorter periods.