The Capital Allowances Act

The Capital Allowances Act allows businesses to claim tax relief on certain capital expenditures—such as equipment, machinery, or business vehicles—by deducting a portion of their cost from their taxable profits over time. This encourages investment by reducing the overall tax burden during the asset’s useful life. Essentially, it provides a systematic way for companies to recover the cost of their investments in assets through annual tax deductions, rather than an immediate expense deduction, aligning tax relief with the asset’s long-term use and value.