UK businesses will receive a new 40 % permanent first‑year allowance for main‑rate plant and machinery, announced by Chancellor Rachel Reeves at Budget 2025 and effective 1 January 2026. The relief allows companies to deduct 40 % of the cost of qualifying assets in the year they are acquired, reducing taxable profits and cutting tax bills. It applies to assets bought for leasing and to unincorporated businesses that are not eligible for full expensing. The measure complements the government’s commitment to a generous capital‑allowance regime, a capped 25 % corporation tax, and a reduction of the main‑rate writing‑down allowance from 18 % to 14 % in April 2026.
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https://www.gov.uk/government/news/business-investment-boosted-with-new-tax-relief-taking-effect-today
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