Capital Allowances on Vans: A 2026 Guide for UK Landlords

If you run a van to manage your property business, the purchase cost can usually be set against your taxable profit through capital allowances. The rules changed meaningfully for 2025/26 and 2026/27, so advice written even a year ago may now give you the wrong answer. Five things have moved: full expensing is now permanent (not a relief that sunsets in March 2026), there is a new 40% first-year allowance for anyone who cannot use full expensing, the main writing-down rate has dropped to 14% with a hybrid rate for periods spanning April 2026, the section 35 dwelling-house bar does not catch your van the way some assume, and a double-cab pickup may not count as a van at all.

Van capital allowances at a glance (2026)

Here are the reliefs that can apply to a van used in a property business. Every one of them excludes cars, which run on a separate regime.

Relief	Who can claim	Rate	New or used?	Cars?	Statute
Full expensing	Companies only	100% in year one	New and unused only	No	CAA 2001 s.45S
40% first-year allowance	Anyone (in practice unincorporated and leasing)	40% in year one, balance to pool	New and unused only	No	FA 2026 s.29 (CAA 2001 s.45U)
Annual investment allowance (AIA)	Anyone	100% up to £1m a year	New or used	No	CAA 2001 s.51A
Main-pool writing-down allowance (WDA)	Anyone	14% a year, reducing balance	New or used	No	CAA 2001 s.56 (FA 2026 s.28)
Zero-emission car FYA (for contrast)	Anyone	100% in year one	New and unused, 0 g/km only	Cars only	CAA 2001 s.45D

Which relief for my van?

The relief that gives you the best result depends on three things: whether you trade through a company, whether the van is new or second-hand, and whether you are on the accruals or cash basis. Find your situation in the first column.

Your situation	Best relief	Why	Statute
Company, new and unused van	Full expensing (100% in year one)	Most generous, no annual cap, companies only	CAA 2001 s.45S
Company, used or second-hand van	AIA (100% up to £1m), then 14% WDA	Full expensing needs a new and unused van	CAA 2001 s.51A, s.56
Sole trader or partnership (accruals), new van	AIA (100%), or the 40% FYA once AIA is used up	AIA is more front-loaded for a single van	CAA 2001 s.51A, FA 2026 s.29
Sole trader or partnership (accruals), used van	AIA (100%), then 14% WDA	The 40% FYA needs a new and unused van	CAA 2001 s.51A, s.56
Anyone on the cash basis	No capital allowances on a van	Deduct the cost as a cash-basis expense; allowances only for cars	Cash-basis rules
Double-cab pickup bought on or after 6 Apr 2025	Usually treated as a car	Emissions-based; excluded from AIA and the 40% FYA. Check primary suitability first	HMRC EIM23151, CAA 2001 s.38B

What are capital allowances, and is a van plant and machinery?

Capital allowances let you deduct the cost of a qualifying business asset from your taxable profit. They are the tax system's substitute for commercial depreciation: you cannot deduct accounting depreciation, but you can claim capital allowances on qualifying capital spending. A van used in a property business is plant and machinery, because plant and machinery allowances apply to expenditure on the provision of plant or machinery wholly or partly for the purposes of a qualifying activity ^[1]. Carrying on a UK property business is a qualifying activity for this purpose ^[2].

The line that matters first is the revenue-versus-capital boundary. The fuel, insurance, servicing and repairs you pay to keep the van on the road are revenue running costs, deducted in the year you incur them. The purchase price of the van itself is capital, and that is what capital allowances cover. One warning before the detail: vans and cars are treated very differently, and getting that classification wrong is one of the most expensive mistakes you can make on a vehicle.

Can a landlord claim capital allowances on a van?

Yes. You can claim capital allowances on a van used to run a property business, and the section 35 dwelling-house bar does not stand in the way, because the van is a separable business vehicle rather than plant installed inside a let home. This boundary is the point most landlords trip on, so it is worth pinning down exactly.

CAA 2001 s.35 bars plant and machinery allowances where the expenditure is incurred in providing plant or machinery for use in a dwelling-house, within a UK property business, an overseas property business or special leasing ^[3]. That is why you cannot claim capital allowances on the boiler, the white goods or the carpets inside a let house or flat: those are plant for use in the dwelling.

A van is not plant inside the dwelling. It is a separable business vehicle that you use to manage and run the portfolio, drive between properties, carry tools and materials, and deal with letting agents and contractors. It does not sit inside any tenant's home, so the s.35 dwelling-house bar does not apply to it. The same section requires a reasonable apportionment where an asset is used partly in a dwelling and partly elsewhere, but a management van that is never installed in a dwelling does not engage that apportionment at all ^[3]. The dwelling-house bar stops you claiming on plant in the property; it does not stop you claiming on the vehicle you use to look after the property.

One caveat decides everything if you run a sole trade: the accounting basis. On the cash basis, a sole trader or partnership cannot claim capital allowances on a van at all, because the cash basis allows capital allowances only for cars; for a van you simply deduct the cost as a cash-basis expense. To claim AIA, the 40% FYA, full expensing or writing-down allowances on a van, you must be on the accruals basis. On the accruals basis you get the full menu (AIA, the 40% FYA on a new van, and 14% WDA), so if capital allowances on the van matter to you, the accruals basis is the route. For the broader plant-and-machinery picture, including fixtures and integral features, see our guide to capital allowances on property and, for shared blocks, HMO common-parts capital allowances and the s.35 claim mechanics.

Full expensing for a van in a limited company

Full expensing is permanent: there is no March-2026 cliff edge, and CAA 2001 s.45S contains no end date. If your property business is run through a limited company, full expensing is normally the most generous relief on a new van. It gives a 100% first-year allowance on new and unused plant and machinery, including a van, with no annual cap. The relief is set out in CAA 2001 s.45S, which applies to expenditure incurred by a company within the charge to corporation tax on plant or machinery that is unused and not second-hand, from 1 April 2023 onwards ^[4].

That permanence is the single most important update for 2026. The relief was made permanent at Autumn Statement 2023 and confirmed at Autumn Budget 2024, and the legislation carries no expiry ^[4]. Any guide that still says full expensing "ends on 31 March 2026" or that "after that date the government may extend or replace the scheme" is out of date. There is nothing to plan around the calendar for.

Two conditions are easy to trip over. First, full expensing is companies only; an unincorporated landlord cannot use it (they use the 40% FYA or AIA instead). Second, the van must be new and unused, so a second-hand van does not qualify for full expensing (AIA or WDA applies to a used van instead).

Worked example, company van. A property company buys a brand-new van for £30,000 in its year to 31 March 2027. Full expensing gives a 100% deduction, so the whole £30,000 is deducted from the company's taxable profit in the year of purchase, leaving nothing to carry into the main pool. The deduction reduces the company's corporation tax for that year; the exact saving depends on the company's marginal rate. For the full mechanics of the relief, see our guide to full expensing capital allowances; whether to incorporate in the first place is covered in our buy-to-let limited company guide.

Do you get a first-year allowance on a new van?

Yes: a new and unused van bought on or after 1 January 2026 qualifies for a 40% first-year allowance. Full expensing being companies-only used to leave unincorporated landlords with only AIA and writing-down allowances, and Finance Act 2026 filled that gap. Section 29 introduces the 40% first-year allowance, inserting CAA 2001 s.45U, for expenditure on new and unused main-rate plant and machinery (a van counts) incurred on or after 1 January 2026 ^[5]. There is no end date, and it excludes cars, second-hand or used assets, and assets acquired to lease to overseas lessees.

A point of accuracy that matters for planning: the legislation sets no incorporation test, so the 40% FYA is not "unincorporated-only" and companies are not barred from it in law ^[5]. The reality is more practical than that. A company buying a qualifying new and unused van will normally claim 100% full expensing because it is more generous, so it has no reason to use the 40% FYA for that van. The 40% FYA comes into its own for anyone who cannot use full expensing: unincorporated landlords (sole traders, partnerships and individuals), and businesses that buy plant to lease out, since full expensing is not available for leasing. It is the route when you cannot or would not use full expensing, not a relief that shuts companies out.

Worked example, sole-trader van. Say you are a sole trader on the accruals basis and you buy a new van for £25,000 in March 2026 (so the expenditure is on or after 1 January 2026). You claim the 40% FYA of £10,000 in year one. The remaining £15,000 goes into the main pool and attracts writing-down allowances at 14% a year on the reducing balance from then on. Compared with AIA (which would give the full £25,000 at once), the 40% FYA is less front-loaded, so where AIA is available you will usually prefer it for a single van; the 40% FYA earns its place once the AIA limit is in play or for assets AIA cannot reach.

Claiming AIA on a van

AIA gives a 100% deduction on a van, new or used, up to £1 million a year, and it is available to everyone: companies, sole traders and partnerships alike. That makes the annual investment allowance the workhorse relief if you are buying a single van. The limit is set by CAA 2001 s.51A(5), and it is permanent at £1 million; the old "temporary £1m reverting to £200,000" framing no longer applies ^[6].

The second feature is what sets AIA apart from full expensing and the 40% FYA: it reaches second-hand assets, so AIA is the route to a 100% upfront deduction on a used van where the first-year reliefs cannot help. Cars are excluded from AIA, so the relief is squarely aimed at goods vehicles such as vans, lorries and trucks ^[7].

If your total qualifying spending in a year exceeds £1 million, the excess goes into the main pool for writing-down allowances rather than being lost; that is rare for a landlord buying a single van. For the full £1 million mechanics, including how the limit is time-apportioned for short or long periods, see our guides to the annual investment allowance and AIA for landlords.

The writing-down allowance on a van

A van sits in the main (general) pool, where the writing-down allowance is 14% a year on the reducing balance from April 2026. You fall back on the WDA where you do not claim a 100% relief, or your spending exceeds the AIA limit, so the cost of the van goes into the main pool. Finance Act 2026 s.28 cut the rate from 18% to 14% by substituting 14% into CAA 2001 s.56(1); the section now reads "14%", annotated as substituted by Finance Act 2026 (c.11), s.28(1) ^[8]. The 14% rate applies for chargeable periods beginning on or after 1 April 2026 for corporation tax and 6 April 2026 for income tax ^[9]. HMRC applies the same 14% main-pool rate, with the straddling-period hybrid below for any period that spans the start date.

Worked example, flat 14% WDA. Suppose £20,000 of van cost sits in the main pool and no other relief is claimed. In a full year you claim 14%, so £2,800, leaving £17,200. The next full year you claim 14% of £17,200, so £2,408, and so on, writing the value down on a reducing-balance basis.

Worked example, straddling-period hybrid. The catch for anyone buying in 2025/26 is that a chargeable period spanning the start date does not use a flat 14%. Finance Act 2026 s.28(2) to (6) sets a single blended rate for a period that begins before, but ends on or after, the start date ^[9]. The blended rate is (18 × the number of days in the period before the start date, plus 14 × the number of days on or after it), divided by the total days in the period, rounded up if it runs to more than two decimal places. For example, an income-tax period of 365 days running 1 January 2026 to 31 December 2026 has 95 days before 6 April 2026 and 270 days on or after it, giving a hybrid rate of about ((18 × 95) + (14 × 270)) ÷ 365, that is roughly 15.05%, not 14%. Use the hybrid rate for the straddling period and the flat 14% for later periods. Note the special rate pool (for integral features and long-life assets, not vans) is unchanged at 6%. For the full pool mechanics, see our guide to writing-down allowance rates.

What about second-hand vans?

Buying second-hand is common, and the relief is different from a new van. Both full expensing and the 40% FYA require the asset to be new and unused, so neither is available on a used van ^{[4] [5]}. What remains, and it is generous, is AIA and writing-down allowances.

If you are unincorporated, AIA gives a 100% deduction on a second-hand van up to the £1 million limit, exactly as it does for a new one. For a company, AIA is also available on a used van (companies just usually prefer full expensing for new vans, which a used van cannot use). If AIA is unavailable or already used up, the cost of the used van goes into the main pool for 14% WDA. One trap to watch: if you buy the van from a connected person (a relative, or a company you control), the connected-party rules treat the purchase as made at market value rather than the price actually paid, so keep evidence of the open-market value.

The used-van rules run deeper than this. For why a second-hand van fails the new-and-unused test, how the AIA-then-WDA fallback works in practice, the connected-party denial of the first-year reliefs, and the balancing charge when you later sell, see our guide to capital allowances on second-hand vans.

Double-cab pickup capital allowances (2025 onwards)

From 6 April 2025, HMRC treats most double-cab pickups as cars, not vans, for both capital allowances and the benefit-in-kind charge, so a double-cab you bought expecting van treatment may be excluded from AIA and the 40% FYA. This is the change that catches people out, and it is recent. Vans are treated as ordinary main-pool plant and machinery, qualifying for full expensing, the 40% FYA, AIA and 14% WDA. Cars are not. Cars are excluded from AIA under CAA 2001 s.38B (General Exclusion 2, which excludes a car as defined by s.268A) ^[7] and are outside the 40% FYA. Instead, a car gets emissions-based treatment: only a new and unused zero-emission car (0 g/km CO2) qualifies for a 100% first-year allowance under CAA 2001 s.45D, available to 31 March 2027 for corporation tax and 5 April 2027 for income tax ^[10]. A car emitting more than 0 g/km gets no FYA: at or below 50 g/km it goes to the main pool at 14%, and above 50 g/km to the special rate pool at 6%.

So the classification, van or car, decides everything. HMRC's working test is "primary suitability": a vehicle whose construction makes it primarily suited to carrying goods is a van; otherwise it is a car. A panel van is a van; a car-derived van can be a van if it genuinely meets the test.

The reclassification to watch is the double-cab pickup. From 6 April 2025, HMRC treats most double-cab pickups as cars rather than goods vehicles, for both capital allowances and the benefit-in-kind charge ^[11]. HMRC no longer uses the VAT payload measure (the old one-tonne rule of thumb) for this; it applies the primary-suitability test, and a typical double-cab pickup, with its passenger accommodation, is usually viewed as not having a predominant goods purpose, so it is a car. The practical consequence is large: a double-cab pickup bought expecting van treatment may instead be a car, excluded from AIA and the 40% FYA. There are transitional rules: an employer who purchased, leased or ordered a double-cab pickup before 6 April 2025 can keep van treatment until the earlier of disposal, lease expiry, or 5 April 2029 ^[11]. If your vehicle is treated as a car, the emissions-based rules apply; see our guide to writing-down allowances on cars.

Private use, benefit-in-kind, and apportionment

How private use is handled depends on your structure. For a sole trader or partnership, you claim capital allowances only on the business-use proportion of the van. If you use the van 70% for the property business and 30% privately, you claim allowances on 70% of the cost, and you should keep a mileage log or similar record to evidence that split. HMRC may challenge a claim that is not supported by records.

For a company, the position is different. The van is a company asset, so the company claims capital allowances on it in full, and private use is not handled by restricting the allowance. Instead, significant private use of a company van by a director or employee can give rise to a van benefit-in-kind (BIK) charge, which is an employment-tax matter on the individual, not a cut to the company's capital allowance. Limited or insignificant private use of a company van can fall outside the BIK charge altogether; either way, keep records of how the van is used.

Practical steps and common mistakes

To claim capital allowances on a van you should:

• Keep the purchase invoice showing the date and cost of the van (and the open-market value if you bought it from a connected person).
• Confirm your accounting basis: accruals to claim on a van, since the cash basis allows capital allowances only on cars.
• Record the business-use proportion if there is any private use (a mileage log is the simplest evidence).
• Choose the right relief for your structure: full expensing (company, new van), the 40% FYA (unincorporated, new van bought on or after 1 January 2026), AIA (anyone, new or used), or WDA.
• Include the claim in your self-assessment return or company tax return for the year the expenditure is incurred.

The mistakes that cost landlords money are predictable. Claiming full expensing or the 40% FYA on a second-hand van fails because both require a new and unused asset. Claiming capital allowances on a van while on the cash basis is not allowed. Expecting van treatment for a double-cab pickup bought on or after 6 April 2025 can be wrong, because most are now cars. And applying a flat 14% WDA to a period that straddles April 2026 gives the wrong figure; the straddling-period hybrid rate applies instead.

How a property accountant can help

Capital allowances on vehicles sit at the intersection of several moving rules: the company-versus-unincorporated relief split, the new 40% FYA, the 14% WDA with its straddling hybrid, the s.35 dwelling-house boundary, and the van-or-car classification that decides whether any of it applies. A specialist property accountant can confirm the classification before you commit to a vehicle, model which relief gives the best outcome for your structure and timing, and make sure the claim is correctly reflected in your return. If you would like that checked for your own position, use the form on this page to arrange a discovery call.

Further reading

For related capital-allowances detail, see our guides to the annual investment allowance, writing-down allowance rates, full expensing, and writing-down allowances on cars. For the bigger picture, see our property investment tax guide and our overview of capital allowances on property.

Sources

1. legislation.gov.uk: CAA 2001 s.11 (general conditions for plant and machinery allowances)
2. legislation.gov.uk: CAA 2001 s.15 (qualifying activities, including UK property business)
3. legislation.gov.uk: CAA 2001 s.35 (exclusion of plant for use in a dwelling-house)
4. legislation.gov.uk: CAA 2001 s.45S (full expensing, companies only, new and unused)
5. legislation.gov.uk: Finance Act 2026 s.29 (40% first-year allowance, inserting CAA 2001 s.45U)
6. legislation.gov.uk: CAA 2001 s.51A (annual investment allowance, £1,000,000)
7. legislation.gov.uk: CAA 2001 s.38B (general exclusions from AIA, including cars)
8. legislation.gov.uk: CAA 2001 s.56 (main-pool WDA 14%, substituted by FA 2026 s.28(1))
9. legislation.gov.uk: Finance Act 2026 s.28 (WDA reduction to 14% and straddling-period hybrid rate)
10. legislation.gov.uk: CAA 2001 s.45D (100% FYA for new zero-emission cars)
11. gov.uk: HMRC EIM23151 (double-cab pickups treated as cars from 6 April 2025)