Ledgery
← BlogCAPITAL ALLOWANCES COMPUTERS

Capital Allowances on Computers and Laptops: 2026 Guide

Capital Allowances on Computers and Laptops: 2026 Guide ! Geometric illustration representing computer tax relief A computer or laptop bought for a UK business usually qualifies for capital allowances, not an ordinary expense deduction.

13 MIN READ

Capital Allowances on Computers and Laptops: 2026 Guide

Geometric illustration representing computer tax relief

A computer or laptop bought for a UK business usually qualifies for capital allowances, not an ordinary expense deduction. Most sole traders and landlords claim the full cost through the Annual Investment Allowance (AIA), reduced by any private use. The claim goes on the Self Assessment return, and the purchase needs to be recorded with its date, cost and business share. Ledgery is built for this kind of record keeping: it stores income and expense records and scans receipts, so a laptop purchase is captured when it happens.

Ledgery
Keep laptop purchase records together
Ledgery scans receipts and organizes income and expense records, helping you capture a business computer purchase when it happens.

TL;DR

  • Computers and laptops kept for use in a business count as plant and machinery, so they qualify for capital allowances.
  • The AIA is £1 million a year. Most computer purchases are claimed in full under it in the period they are bought.
  • A sole trader or partner who also uses the laptop privately reduces the claim by the private share. A £600 laptop used half the time gives a £300 claim.
  • The main pool writing down allowance falls to 14% from April 2026, and a 40% first year allowance now exists for main pool assets.
  • Records of the purchase, the business share and any later sale support the claim and are needed if HMRC asks.

Table of Contents

Do computers and laptops qualify?

Yes, in most cases. GOV.UK describes plant and machinery as items kept for use in the business. A desktop, laptop, monitor, printer or tablet used to run a trade or a rental business fits that description. The cost is treated as capital expenditure, which means it is not entered as a normal expense line. It is relieved through capital allowances instead.

Three points decide whether a claim is available.

  1. The business must own the item. GOV.UK states that leased items do not qualify unless the contract is hire purchase or a long funding lease. A laptop bought on hire purchase qualifies, and the pool cost is the original price, not the interest or charges, according to the HS252 helpsheet.
  2. The item must be used in the business. Costs of the item, its installation and improvements all go into the claim. VAT is included in the cost only when the business is not VAT registered.
  3. The claimant must be in business. Employees rarely qualify. HMRC’s guidance says most employees cannot meet the statutory test for computers and laptops because the employer usually supplies what is needed.

Software is treated separately. It is normally revenue expenditure deducted in the year it is incurred, not part of the hardware claim, although the treatment depends on the type of software and how it is acquired.

Which allowance applies to a computer

There are three routes, and the order matters because the first usually gives the biggest and fastest relief.

Annual Investment Allowance

GOV.UK states that the AIA amount is £1 million, and that it can be claimed on most plant and machinery in the period the item is bought. For a self-employed person buying a laptop, a monitor and a printer in the same year, the whole cost can reduce taxable profit for that year, subject to private use.

The AIA does not cover business cars, items the owner had for another reason before using them in the business, or items given to the business. In those cases writing down allowances apply instead. A personal laptop that starts to be used for freelance work after being owned for years is an example: it enters the business at a different value and under different rules, so the purchase record should say how the item was obtained.

First year allowance at 40%

A 40% first year allowance (FYA) is available for assets bought on or after 1 January 2026 that go into the main pool, according to the Low Incomes Tax Reform Group. It was first open to companies. A commentary from an accountancy firm reports that it extended to sole traders and partnerships from 6 April 2026, with the remaining 60% going into the main pool and relieved over time.

For a computer, the AIA is generally the better route when it is available, since it gives 100% in the first year. The FYA matters mainly when spending in a period goes beyond the AIA limit, which is unusual for a one-person business.

Writing down allowances

Writing down allowances

Spending not covered by the AIA or the FYA goes into a pool and is relieved at a yearly percentage. GOV.UK’s rates and pools page gives the main pool rate as 14% from April 2026 (1 April 2026 for Corporation Tax, 6 April 2026 for Income Tax), and 18% before that. The special rate pool is 6%. A computer goes in the main pool. If an accounting period includes the day the main rate changed, a hybrid rate has to be worked out for that period.

The table sets out how the routes compare for a computer.

Route Relief in first year Typical use
AIA 100% of qualifying cost, up to £1 million Most laptop and computer purchases
40% first year allowance 40%, remainder to main pool Main pool spending that goes beyond the AIA
Writing down allowance, main pool 14% a year from April 2026 Items excluded from the AIA, or the balance of a pool

Depreciation is a different thing

Accounts often depreciate a laptop over several years. That charge is not what HMRC allows. For tax, the accounting depreciation is added back to profit and capital allowances are deducted instead. A sole trader using simple records does not need a depreciation schedule for the return. What matters is the purchase cost, the date, and the business use. The 14% and 6% rates above are tax rates and are independent of any accounting depreciation figure.

Private use of a laptop

Most freelancers use one machine for everything, so this is the step where claims go wrong.

GOV.UK states that a sole trader or partnership cannot claim the full value of items also used outside the business. The claim is reduced by the share of private use. Its example: a £600 laptop used outside the business half the time gives a claim reduced by 50%, which is £300.

Two further rules apply to the same situation.

  • The item goes into a separate single asset pool, as the rates and pools page explains. The HS252 helpsheet adds that a single asset pool takes the rate of the pool the asset would otherwise be in, so a computer is at the main rate.
  • HMRC’s manual states that AIA or FYA on a part-private asset is reduced on a just and reasonable basis, taking account of how far the asset is likely to be used for other purposes.

A worked example

A graphic designer buys a £1,200 laptop in the tax year and uses it 80% for client work. The AIA claim is £960 (80% of £1,200). The £240 private share is not claimed. If the designer pays tax at a 20% marginal rate, the claim reduces the tax bill by £192. If the machine were used only for work, the claim would be the full £1,200 and the reduction £240.

Laptop cost split into claimed and private amounts

The percentage has to be defensible. A rough estimate with no basis is weak. A note of typical weekly hours for business and for other use is stronger. The accountancy firm SCCS says HMRC is paying attention to private use adjustments, and recommends adjusting the apportionment if use changes during the year and keeping the working papers.

Limited companies

Companies follow a different set of rules. The sole trader private use reduction does not apply in the same way, and personal use by a director is handled as a benefit in kind instead. Ledgery is designed for sole trader and property income and does not cover limited companies, so the rest of this guide concerns individuals and partners.

Landlords and computers

Property owners who run a rental business from a laptop follow the same logic. The machine must be kept for use in the rental business, and any private use reduces the claim. Landlords record the purchase alongside rental income and expenses, since the allowance reduces rental profit. Lower taxable profit can also change how lenders view income, which is one reason landlords look at rental income mortgage rules before applying for finance.

Records that support the claim

HMRC’s guidance on avoiding errors, GFC5, sets out what to keep. Its record keeping recommendations cover all acquisitions and disposals, including:

  • the name of the asset
  • the date of acquisition and the acquisition cost
  • how the item was obtained: bought, received as a gift, or already in use for another purpose
  • the date of disposal and the disposal receipts or value

When an asset is also used for other purposes, the business must be able to show how use is split. The guidance gives the example of laptop records that track the time used for the qualifying activity.

In practice a claim fails at the paperwork stage more often than at the rules stage. A receipt photographed on the day of purchase, stored with the date and amount, removes the most common gap. Ledgery’s receipt scanning does this, and the stored income and expense records can be exported when an accountant or a return needs them. The related guides on personal and business expenses and mobile phone expenses apply the same business-use thinking to other equipment.

Cash basis or accruals

The accounting basis a sole trader uses can change how equipment appears in the profit calculation. The cash vs accruals guide explains the two methods. The choice should be settled before the first purchase is entered, so the laptop is recorded in the right place from the start.

Selling or replacing a computer

A sale can reverse part of the relief. GOV.UK states that if 100% of an item was claimed under the AIA or a first year allowance and nothing remains in the pool the item belongs to, the sale value is added to profits as a balancing charge. For a laptop sold for £150 after a full claim, £150 goes into profit in the period of the sale. Replacing the machine in the same period often offsets this, because the new purchase qualifies for its own claim.

The disposal date and amount belong in the same record as the purchase. When the asset was part-private, only the business share of the sale is brought into the calculation, so the split recorded at purchase is useful again here.

When to claim

Capital allowances are claimed on the Self Assessment return. The Low Incomes Tax Reform Group states that a claim must normally be made by 12 months after the 31 January filing deadline for the return. Missing that window means the relief is lost, so the purchase should be recorded when it happens and not reconstructed later.

The pre-trading expenses guide covers computers bought before a business starts. The timing and the records differ from an ordinary purchase in a trading year.

Our view

A computer claim is a small calculation. It needs a cost, a date and a business share. The difficulty is that these three facts are created months before the tax return and are easy to lose.

Ledgery brings receipt scanning, income and expense records, quarterly HMRC updates and deadline reminders into one place for sole traders and property owners. A laptop receipt photographed when the machine is bought is stored with the other records for the year, ready for the return and ready to export for an accountant.

Making Tax Digital for Income Tax means self-employed people and landlords will update HMRC every quarter. Keeping equipment purchases in the same record as income and expenses avoids a separate spreadsheet for assets.

The Ledgery Team

Keeping the records in Ledgery

Ledgery is income tax management software for UK self-employed people and property owners. Users photograph a receipt, the AI-powered scanning reads it, and the record sits with the rest of the income and expenses used to build quarterly updates for HMRC. The first quarter is free, followed by a monthly or annual subscription on the Simple, Grow or Pro plan.

Ledgery

The plans and the free first quarter are on the Ledgery website.

FAQ

Can a sole trader claim capital allowances on a laptop?

Yes. A laptop kept for use in the business qualifies as plant and machinery, and the cost is usually claimed in full under the AIA in the year of purchase. Any private use reduces the claim by the same proportion.

What is the depreciation rate for computer equipment?

For tax there is no depreciation rate. Capital allowances replace it: the AIA gives up to 100% in the first year, and the main pool writing down allowance is 14% from April 2026. Accounting depreciation is added back to profit and is not deducted on the return.

Can a laptop used partly for personal use be claimed?

Yes, for the business share. A sole trader or partner reduces the claim by the private use proportion and keeps the item in a single asset pool. HMRC’s example is a £600 laptop used half the time outside the business, which gives a 50% reduction.

Is a leased computer eligible?

Not usually. Plant and machinery allowances need ownership, with the exceptions of hire purchase and long funding leases. A laptop bought on hire purchase qualifies on its original cost, not on the interest.

What happens when a claimed computer is sold?

If the full cost was claimed and nothing remains in the pool, the sale value is added to profit as a balancing charge. The sale date and amount should be recorded with the original purchase.

Sources

LAUNCHING APRIL 2027
Ledgery does the four updates and the final declaration. £3 a month.

Self-employment and property income in one subscription, 30 days free to start. Join the early access list and we’ll email you once, when it opens.

Join early access
capital allowances computers

This article is general information about Making Tax Digital, not tax advice for your situation. Rules and dates come from HMRC guidance current at the date of publication — check the latest position before acting, or speak to an accountant.