What is the annual investment allowance?

What is the annual investment allowance? The annual investment allowance (AIA) lets you deduct the full cost of most equipment and vans from your profits in the year you buy them, up to £1 million. In 2026-27 it matters if you use traditional accounting. £1 million for a 12-month accounting period. It has been £1 million for sole traders since 1 January 2019, and it is adjusted if your accounting period is shorter or longer than 12 months. No. GOV.UK says business cars do not qualify. Vans, lorries and trucks are not cars for capital allowances, so they can qualify. Usually not. Under the cash basis you can only claim capital allowances on cars, so a van, tools or a laptop you keep for the business are claimed as ordinary allowable expenses instead. Read the full answer, with every source, at rightotax.co.uk.