Tools and equipment

Yes

Tools and equipment bought for your trade are deductible. Consumable or short-lived items (blades, fixings, sandpaper) are direct business expenses. Lasting assets (tools, power equipment, scaffolding) go through capital allowances (the way HMRC lets you claim the cost of bigger purchases over time or upfront). The Annual Investment Allowance lets you deduct the full cost in the year of purchase, up to £1 million per year. If you use cash basis accounting (where you record income and spending when money changes hands), you can claim most equipment as a direct expense without using capital allowances.

Key thresholds

AIA limit: £1,000,000 per year.

Common questions

Can I claim the cost of a new drill and set of tools?
Yes. Trade tools used solely for business are fully deductible. Deduct small tools as a direct expense; claim capital allowances for more expensive equipment.
I bought a scaffold tower for £800. How do I claim it?
As a capital item, claim it through the Annual Investment Allowance. You can deduct the full £800 in the tax year you bought it.

Watch out for

—Consumables like drill bits, blades, and sandpaper are direct expenses. No capital allowances needed.
—Equipment hired rather than bought: the hire cost is a direct expense, not a capital allowance.

Cash basis vs traditional accounting

On cash basis accounting, you can claim most tools and equipment as a direct expense. No capital allowances needed. On traditional accounting, lasting assets go through capital allowances (AIA gives full deduction in year of purchase). Consumables like drill bits and blades are a direct expense under both methods.

How to choose your accounting method

HMRC sources

https://www.gov.uk/capital-allowances/annual-investment-allowancehttps://www.gov.uk/expenses-if-youre-self-employed

Last verified: May 2026 · Tax year 2026/27

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This guidance is for general information only. Tax rules change. Verify with HMRC or a qualified accountant before filing.