Autumn Budget 2026: Capital allowances
Two policy changes have been announced relating to capital allowances for businesses.
Firstly, the main rate writing down allowance (WDA) for capital allowances will be reduced from 14% to 12% from 1 April 2027 for companies and from 6 April 2027 for individuals. This reduction comes only a year after the WDA main rate was reduced from 18% to 14%.
Second, the rate of relief available for the new first year allowance (FYA), introduced from 1 January 2026, will be increased from 40% to 50% from 1 January 2027. This FYA is available for unincorporated businesses as well as companies and includes expenditure on assets used for leasing, but excludes second hand assets, cars and overseas leasing.
