Should you claim less than full capital allowances

Q: What mistakes do people make?

Saving the AIA for next year. Unclaimed AIA expenditure falls into the pool; the AIA itself is not carried forward. Claiming partner by partner. A partnership makes one claim for the business, so the amount disclaimed affects every partner's share. Relying on a loss claim to fix things. Section 64 loss relief cannot be partly claimed, so the planning has to happen in the allowance claim. Forgetting the slower rate. Deferred relief now comes at 14% a year, so a large disclaimer can take many years to unwind. Missing the amendment window. Changing your mind after the time limit is not a ground for a late claim. For the basics of each allowance see capital allowances explained and the annual investment allowance. If HMRC opens a check into your return, tax investigation insurance pays your accountant's fees. Solar Protect cover pays up to £100,000 with no excess; it never pays tax, interest or penalties. Read how our cover works or get a quote.

You never have to claim the full capital allowances available. The annual investment allowance, first year allowances and writing down allowances can all be claimed in part or not at all, and most expenditure you do not claim stays in the pool to give writing down allowances in later years. Claiming less is most useful when a full claim would waste your personal allowance or create a loss that has to be used in an unhelpful way.

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Is it allowed to claim less than the maximum?

Yes. The Capital Allowances Act 2001 (CAA 2001) builds the choice into each allowance:

Annual investment allowance: section 51A(7) lets a person claim the AIA on all the qualifying expenditure or only some of it.
First year allowances: section 52(4) lets a person claim on the whole or a part of the first year qualifying expenditure. This covers full expensing and the 40% allowance.
Writing down allowances: section 56(5) lets a claimant require the allowance to be reduced to a specified amount, and section 56A(4) does the same for the small pool allowance.

HMRC’s Capital Allowances Manual confirms at CA11120 that allowances must be claimed, that a claim does not need to be for the full amount, but that the amount claimed must be specified. CA11140 repeats the point for companies. GOV.UK gives the practical version: if you do not want to claim the full cost, for example because you have low profits, you can claim writing down allowances instead, or part of the cost as AIA and part as writing down allowances.

What happens to the part I do not claim?

For plant and machinery the unclaimed amount is deferred, not lost. Expenditure on which you do not take AIA or a first year allowance goes into the pool, and GOV.UK confirms that any 100% first year allowance you do not claim can be relieved through writing down allowances. Where you claim less than the full writing down allowance, the pool balance carried forward is simply higher.

Deferral has a cost. The main rate writing down allowance is 14% a year on a reducing balance for chargeable periods from 1 April 2026 for companies and 6 April 2026 for income tax, and the special rate is 6%. Relief on a disclaimed amount therefore arrives slowly. The AIA itself cannot be carried forward: GOV.UK states that you can only claim it in the period you bought the item.

Some allowances are different. For research and development allowances HMRC states at CA60500 that if a reduced amount is claimed the balance cannot be claimed later. Check the rules for the specific allowance before disclaiming.

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Why would a sole trader or partner claim less?

The main reason is the personal allowance. For 2026 to 2027 the standard personal allowance is £12,570. Income up to that amount is taxed at 0%, so an allowance that reduces profit below it saves no tax. Claiming less keeps profit at the level the personal allowance covers and leaves the rest in the pool for a year when it will save tax.

The second reason is that loss relief cannot be tailored in the same way. If capital allowances turn a profit into a loss and you claim relief against general income under section 64 of the Income Tax Act 2007, HMRC’s Business Income Manual at BIM85080 says partial claims are not permitted (Butt v Haxby). The loss must be set as far as possible against the income of the year, even if this wastes personal allowances. Capital allowance claims, unlike loss claims, can be set at any figure you choose, so the place to manage the result is the allowance claim. See trading losses against other income for how those claims work.

At the other end of the scale, a large claim in a year when income is between £100,000 and £125,140 can be worth more than usual, because the personal allowance is reduced by £1 for every £2 of adjusted net income above £100,000. See personal allowance tapering.

Can you show a worked example?

Illustration only, looking at income tax alone. Priya is a sole trader with no other income. For 2026 to 2027 her trading profit before capital allowances is £16,000. She buys £10,000 of equipment that qualifies for the AIA.

	Full AIA claim	Partial AIA claim
Profit before allowances	£16,000	£16,000
AIA claimed	£10,000	£3,430
Taxable profit	£6,000	£12,570
Personal allowance unused	£6,570	£0
Expenditure carried to main pool	£0	£6,570

Both routes produce no income tax this year. The partial claim leaves £6,570 in the main pool, which gives writing down allowances of 14% a year from the next period onwards (£920 in the first year, rounded). The full claim uses £6,570 of allowances against income that was already tax free. Other taxes based on profit can change the answer, so test the whole position before deciding.

Why would a company claim less?

Companies have no personal allowance, but the same logic can apply where allowances would otherwise be used against profits taxed at a lower rate than profits expected later. Corporation tax is 19% on profits of £50,000 or less and 25% on profits over £250,000, with marginal relief between those limits, and the limits are reduced for short periods and associated companies. A company whose profits are expected to rise may prefer relief in the higher rate years.

A company might also disclaim to avoid creating a trading loss that it cannot use efficiently. Carried forward losses come with their own conditions; see company trading losses. If assets are likely to be sold soon, also look at how full expensing disposal charges work before deciding how much to claim.

How do I make a partial claim, and can I change it later?

Capital allowances are claimed in the tax return by entering the amount you want. For income tax, CA11130 says the time limit for making or amending a claim is the normal time limit for amending the return, which is the first anniversary of 31 January following the tax year. Partnerships claim at partnership level, not partner by partner.

For companies, CA11140 says a claim may be made, amended or withdrawn up to 12 months after the filing date for the return, which in most cases means two years after the end of the accounting period. That deadline is extended if HMRC opens an enquiry. HMRC can accept a late claim only in limited cases and not for a change of mind, hindsight, or an oversight or error by the company or its advisers.

What mistakes do people make?

Saving the AIA for next year. Unclaimed AIA expenditure falls into the pool; the AIA itself is not carried forward.
Claiming partner by partner. A partnership makes one claim for the business, so the amount disclaimed affects every partner’s share.
Relying on a loss claim to fix things. Section 64 loss relief cannot be partly claimed, so the planning has to happen in the allowance claim.
Forgetting the slower rate. Deferred relief now comes at 14% a year, so a large disclaimer can take many years to unwind.
Missing the amendment window. Changing your mind after the time limit is not a ground for a late claim.

For the basics of each allowance see capital allowances explained and the annual investment allowance.

If HMRC opens a check into your return, tax investigation insurance pays your accountant’s fees. Solar Protect cover pays up to £100,000 with no excess; it never pays tax, interest or penalties. Read how our cover works or get a quote.

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Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 19 October 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.