Yes. Vans count as plant and machinery for capital allowances, and vehicles that do not count as cars can qualify for the annual investment allowance and some first-year allowances. [1] Full expensing is available only to companies, for qualifying plant and machinery. The main rate of writing down allowance changed from 18% to 14% on 1 April 2026 for Corporation Tax and 6 April 2026 for Income Tax. [3]
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Can a business claim capital allowances on a van?
Yes. Capital allowances can be claimed on business vehicles, for example vans, lorries or business cars, which are treated as plant and machinery. [1] They let a business deduct some or all of the value of an item from its profits before tax.
Whether a particular van purchase may support capital allowance claims depends on who bought it, when it was bought and which allowance fits. Cars sit under separate rules, and the guide to car capital allowances covers those.
Are vans covered by AIA?
A van bought for business use counts as plant and machinery, and the annual investment allowance (AIA) can be claimed on most plant and machinery up to the AIA amount. [2] When an item qualifies for AIA, its full value can be deducted from profits before tax.
Vehicles that do not count as cars for capital allowances can qualify for the annual investment allowance and some first-year allowances. This is one of the main reasons the van and car rules are kept apart.
The amount available each year, and how it is shared and claimed, are covered in the guide to the Annual Investment Allowance.
What is the capital allowance rate for motor vehicles?
The rate depends on which allowance is used. Writing down allowances can be claimed where plant and machinery does not qualify for another allowance, or where value remains after claiming the maximum amount of another allowance.
The main rate of writing down allowance changed from 18% to 14% on 1 April 2026 for Corporation Tax and on 6 April 2026 for Income Tax. [3]
If an accounting period includes the date the rate changed, a hybrid rate is worked out for that period, based on how much of the period falls before the change and how much falls after. For a company paying Corporation Tax with an accounting period from 1 January 2026 to 31 December 2026, the hybrid rate is 14.99%. Further calculations are needed to adjust the writing down allowances if the accounting period is more or less than 12 months.
Rates for cars are covered in the cars guide linked above.
First-year allowances a van purchase could use
Only companies can claim full expensing and the 50% first-year allowance. Full expensing lets a company deduct 100% of the cost of qualifying plant and machinery from its profits before tax in the year it was bought.
The 40% first-year allowance can be claimed for plant and machinery bought on or after 1 January 2026 that is new and unused, qualifies for the main rate of writing down allowance and is not a car, and it deducts 40% of the cost from profits before tax. In the next accounting period, writing down allowances can be claimed on the remaining 60% of the cost.
100% first-year allowances can only be claimed on certain plant and machinery, if it is bought new and unused.
A business that wants to claim 100% first-year allowances, full expensing and the 50% first-year allowance, or the 40% first-year allowance must claim in the accounting period it bought the item.
Choosing which allowance to use on a van
If a van's cost qualifies for more than one type of plant and machinery allowance, the business can choose which to claim, but it cannot claim more than one allowance on the same amount of expenditure. [4]
In most cases, the value used is what was paid for the van.
Day-to-day running costs are handled differently: sole traders and partnerships claim them as business expenses, and limited companies deduct them from profits as a business cost.
Vans owned by sole traders and partnerships
A sole trader or partnership that uses cash basis can only claim capital allowances on business cars. That makes the accounting basis worth checking before treating a van as a capital allowances item.
A sole trader or partnership cannot claim the full value of items also used outside the business, and reduces the capital allowances claimed by the amount the asset is used outside the business. A van also used for private trips is one case where this reduction could apply, so a record of business and private use may help identify the right figure.
Sources
Rates, thresholds and dates in this guide come from these sources. Check the source for the current figure.