Home / Questions / What Is the Annual Investment Allowance?
Last updated 23 October 2026. Written by the Limited Company Accountant UK team, part of Accotax. Figures are for the 2026/27 tax year; always check GOV.UK for the latest rates.
Short answer: The Annual Investment Allowance gives 100% Corporation Tax relief on up to £1 million a year of qualifying plant and machinery.
At a glance
| Limit | £1,000,000 a year |
|---|---|
| Applies to | New and second-hand qualifying plant |
Typical items
Computers, tools, machinery, vans and office equipment, but not most cars.
Timing
Relief is given in the period of purchase.
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The bottom line
The Annual Investment Allowance gives 100% Corporation Tax relief on up to £1 million a year of qualifying plant and machinery. If you would rather not do it alone, our fixed fees start at £45.83 + VAT a month.
Frequently asked questions
Does AIA apply to cars?
No, cars follow separate rules.
Is AIA better than full expensing?
They can be used together, since full expensing has no cap.
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