Computer equipment
Last checked 17 June 2026 · HMRC source
Laptops, desktops, monitors and similar equipment bought for the business are generally claimable, typically as capital allowances rather than as a simple running cost.
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Conditions
- Equipment used in the business usually qualifies for capital allowances. The Annual Investment Allowance (AIA) gives full relief in the year of purchase, up to £1 million per accounting period. AIA is available to sole traders, partnerships, and limited companies.
- Under cash basis accounting, computers and equipment are claimed as an allowable expense directly rather than through capital allowances (cash basis only permits capital allowances on business cars).
- Where there is private use, the claim is restricted to the business proportion.
- For a limited company, the equipment is a company asset bought with company funds.
- Employees can claim capital allowances on equipment necessarily required for the job, but only where there is no significant private use and the employer has not provided the item.
- Capital-allowances rules changed in 2026 for spending above the £1m AIA: a new 40% first-year allowance now applies to qualifying new main-rate equipment (companies from 1 January 2026; sole traders and partnerships from 6 April 2026) — new items only, with cars and second-hand assets excluded. Anything not covered by AIA or this allowance is written down at the reduced main-pool rate of 14% (down from 18%) from April 2026. For most small businesses the £1m AIA still gives full relief in the year of purchase, so these changes mainly affect larger purchases.
Common mistakes
- Treating a capital purchase as a normal day-to-day expense rather than claiming it correctly as a capital allowance.
- Ignoring private use on a device that is also used personally.
- An employee buying kit the employer would have provided and assuming it is automatically claimable.
What to keep
- Purchase invoices showing the item and cost.
- A note of the business-use proportion where the device is also used privately.
Real-world example
A sole trader buys a £1,200 laptop used almost entirely for work. They claim it through the Annual Investment Allowance, restricting the claim slightly to reflect occasional personal use.
Frequently asked
How the tax relief on this actually works: capital items like this are usually claimed through capital allowances, not as an everyday running cost. Capital allowances explained →
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Related allowances
Source: HMRC guidance