Can I claim AIA on second-hand equipment?

Buying a used machine, computer or item of business equipment does not automatically prevent an AIA claim. The key question is whether the expenditure qualifies as plant and machinery for your business and meets the AIA rules. Cars are excluded, and assets received as gifts or previously owned personally can have different treatment. Transactions involving connected people also need closer checking. Keep the purchase agreement and invoice, record when the expenditure was incurred and explain how the equipment is used. Recoverable VAT is normally excluded from the allowance cost. If there is private use, or the purchase includes several different assets, the claim may need an appropriate adjustment.

AIA can give immediate tax relief for qualifying expenditure within the allowance available for the accounting period, but a purchase is not automatically eligible just because it is business-related. Check other spending in the same period and any sharing of the allowance between related businesses. Where AIA is unavailable or not fully used, other capital allowance rules may still provide relief. A sole trader using the cash basis may deduct qualifying equipment costs under that system instead. CASS can check the treatment before the return is prepared and compare the timing of relief with your profits. Keep the asset on your records because selling it later can affect the tax calculation.