Making the Most of Full Expensing and the Super-Deduction Successor (2025/26)
- JSC Accounting Team
- Oct 7
- 2 min read
The Super-Deduction that ran until 2023 helped businesses invest in growth, and now its successor, Full Expensing, keeps many of those benefits going. If you’re planning major purchases, it’s worth knowing how it fits alongside your other reliefs.
What is Full Expensing?
From April 2023, companies that buy new “main-rate” plant or machinery can deduct 100% of the cost immediately against taxable profits, with no annual cap. It’s designed to encourage business investment and effectively replaces the Super-Deduction for limited companies.
Example: If your company spends £60,000 on new machinery, you can deduct the entire £60,000 from profits that year. At the 25% corporation-tax rate, that’s a £15,000 tax saving in year one.
Qualifying assets
Full Expensing applies to new (not second-hand) equipment that qualifies for the 18% main pool, such as:
Computers and servers
Machinery and production equipment
Office desks, shelving, and racking
Used or second-hand assets still qualify for AIA, but not for Full Expensing.
Interaction with the AIA
Small businesses can continue to use the AIA (£1 million limit) alongside Full Expensing.
In practice:
Use AIA for second-hand or special-rate assets.
Use Full Expensing for new qualifying assets beyond that limit.
Together, they give flexibility and near-total first-year relief for most capital spending.
Disposal rules
One key difference is what happens when you sell an asset. Under Full Expensing, if you dispose of the equipment later, you must add back the sale proceeds to your taxable profits. So, if you sell a £20,000 machine for £8,000 after two years, you’ll add £8,000 back to income in that year’s tax return.
Planning tip
Time large purchases carefully. Buying just before your year-end can bring forward tax savings by a full year. Combine this with director-pension contributions and you can significantly reduce your year-end liability.
The simple takeaway
Full Expensing is one of the most valuable tax breaks for small companies, but only if you plan purchases strategically. Review your upcoming spending now to see how it fits with your business’s profit forecast.
Need help making sense of your taxes? JSC Accounting works with small businesses across the UK to keep things simple and compliant. Get in touch for a friendly chat about how we can help.
