What video equipment qualifies for capital allowances?

Most professional videography equipment qualifies for capital allowances, including cameras, lenses, lighting, audio gear, drones, editing computers, and specialized software. The key requirement is that the equipment is used for business purposes. Vehicles used primarily for business also qualify. Items must be classified as plant and machinery under HMRC rules. The Annual Investment Allowance covers most equipment up to £1 million per year, while writing down allowances apply to ongoing claims. Proper documentation of business use is essential for compliance.

How much can I claim through Annual Investment Allowance?

For the 2024/25 tax year, the Annual Investment Allowance (AIA) limit is £1 million. This means you can deduct the full cost of most equipment purchases from your taxable profits, up to this threshold. Most videographers will never reach this limit, making it an extremely valuable allowance. The AIA applies to most plant and machinery excluding cars. If you purchase £50,000 of equipment, you can claim the full £50,000 against your profits. Any amounts over £1 million would go into writing down allowances at 18% per year.

Can I claim capital allowances on used equipment?

Yes, you can claim capital allowances on used equipment purchased for your videography business, provided it qualifies as plant and machinery. The same rules apply as for new equipment - it can be covered by your Annual Investment Allowance up to the £1 million limit. The claim is based on the purchase price you paid for the used equipment. You'll need to keep records of the purchase including date, cost, and supplier details. The equipment must be used for business purposes to qualify, with mixed-use items requiring apportionment.

What records do I need for capital allowance claims?

You must maintain detailed records including purchase invoices showing dates, costs, and supplier details. For each asset, document the description, how it's used in your business, and for mixed-use items, the business percentage. Keep records of disposals including dates and sale proceeds. HMRC requires you to maintain these records for at least 6 years from the end of the tax year they relate to. Using tax planning software simplifies this process by automatically tracking purchases, calculating allowances, and generating compliance-ready reports for your tax returns.

Capital Allowances for Videographers

Understanding capital allowances for your videography business

As a videographer, you invest heavily in professional equipment to deliver quality work to your clients. The good news is that HM Revenue & Customs (HMRC) allows you to claim capital allowances on these business assets, significantly reducing your tax bill. Understanding what capital allowances videographers can claim is essential for optimizing your tax position and ensuring you're not overpaying. Many videographers miss out on thousands of pounds in tax relief simply because they don't understand the rules or find the process too complex.

Capital allowances let you deduct the cost of certain capital assets from your taxable profits. For the 2024/25 tax year, the rules provide generous allowances that can make a substantial difference to your bottom line. Whether you're a sole trader operating through self assessment or running a limited company, knowing exactly what capital allowances videographers can claim will help you make smarter purchasing decisions and plan your tax liabilities more effectively.

Essential equipment eligible for capital allowances

Videographers typically invest in a wide range of equipment that qualifies for capital allowances. The most common items include cameras, lenses, lighting equipment, audio recording gear, drones, editing computers, and specialized software. Understanding what capital allowances videographers can claim starts with identifying all your business assets that meet HMRC's criteria for plant and machinery.

Here's a comprehensive list of equipment that typically qualifies:

Professional video cameras and DSLR/mirrorless cameras
Camera lenses, filters, and accessories
Lighting equipment including LED panels, softboxes, and stands
Audio equipment such as microphones, recorders, and mixers
Drones for aerial videography
Computers, monitors, and external storage for editing
Video editing software and specialized applications
Gimbals, sliders, and other stabilization equipment
Backdrops and studio equipment
Vehicles used primarily for business purposes

Annual Investment Allowance: Your first £1 million

The Annual Investment Allowance (AIA) is the most valuable capital allowance for most videographers. It allows you to deduct the full cost of most plant and machinery (excluding cars) from your profits before tax, up to £1 million per year. This means if you purchase £20,000 worth of new camera equipment, you can deduct the entire £20,000 from your taxable profits for that year.

For the 2024/25 tax year, the AIA limit remains at £1 million, which is more than sufficient for most videography businesses. This allowance applies to most equipment purchases, making it crucial to understand what capital allowances videographers can claim under this generous scheme. The AIA is particularly beneficial when making significant equipment upgrades or expanding your business capabilities.

Using a dedicated tax planning platform can help you track your AIA usage throughout the year and plan major purchases to maximize your tax relief. The software automatically calculates your remaining allowance and helps you optimize the timing of equipment investments.

Writing down allowances for ongoing claims

If you exceed the AIA limit or purchase items that don't qualify for full immediate relief, writing down allowances (WDAs) come into play. These allow you to claim a percentage of the remaining value each year. The main pool rate is 18% per annum on a reducing balance basis, while special rate pool items (including integral features in buildings) receive 6%.

Most videography equipment falls into the main pool. For example, if you have £5,000 of equipment in your main pool after claiming AIA, you could claim £900 (18%) in the first year, then 18% of the remaining £4,100 the following year, and so on. Understanding what capital allowances videographers can claim through WDAs ensures you continue to benefit from tax relief on older equipment.

First-year allowances for enhanced relief

First-year allowances (FYAs) provide enhanced capital allowances for specific types of equipment. While most standard videography gear qualifies for AIA, some specialized equipment might be eligible for FYAs. These include energy-efficient equipment and certain zero-emission vehicles if used for business transportation.

FYAs allow you to deduct the full cost of qualifying assets from your profits before tax, similar to AIA but without counting toward your AIA limit. This can be particularly valuable if you're approaching your AIA threshold but need to make additional equipment purchases. When considering what capital allowances videographers can claim, it's worth checking if any of your planned purchases qualify for these enhanced allowances.

Calculating your capital allowance claims

Accurate calculation is essential when determining what capital allowances videographers can claim. Let's consider a practical example: A videographer purchases £25,000 of new equipment in the 2024/25 tax year, including a £5,000 camera, £3,000 in lenses, £4,000 lighting equipment, £8,000 computer and editing setup, and £5,000 drone.

Using AIA, the entire £25,000 can be deducted from taxable profits. For a sole trader paying higher rate tax at 40%, this creates a tax saving of £10,000. For a limited company paying corporation tax at 25% (for profits over £250,000) or 19% (small profits rate), the saving would be £6,250 or £4,750 respectively. These substantial savings highlight why understanding what capital allowances videographers can claim is so important.

Modern tax planning software with real-time tax calculations automatically computes these savings as you input equipment purchases, eliminating manual calculations and reducing errors.

Record-keeping requirements and deadlines

To successfully claim capital allowances, you must maintain accurate records of all business asset purchases. HMRC requires you to keep records of purchase dates, costs, and how each asset is used in your business. For self-employed videographers, claims are made through your self assessment tax return, with deadlines of January 31 following the end of the tax year for online filing.

Limited companies claim through their corporation tax return, with filing deadlines typically 12 months after the end of the accounting period. Understanding what capital allowances videographers can claim is only half the battle – maintaining proper records ensures you can substantiate your claims if HMRC enquires. Using a comprehensive tax planning platform helps automate record-keeping and ensures you never miss a claiming opportunity.

Common pitfalls and how to avoid them

Many videographers make costly mistakes when claiming capital allowances. The most common errors include missing eligible items, incorrectly classifying assets, failing to claim for partial business use, and not maintaining adequate records. Another frequent mistake is not understanding what capital allowances videographers can claim for assets purchased before starting the business or for items used partly for personal purposes.

For mixed-use assets, you can only claim the business proportion. If you use your editing computer 70% for business and 30% personally, you can only claim 70% of the cost. Proper documentation of business use percentages is essential. Understanding what capital allowances videographers can claim in these scenarios prevents overclaiming and potential HMRC penalties.

Planning your equipment purchases strategically

Strategic timing of equipment purchases can significantly enhance your tax position. If your accounting period is ending soon and you have unused AIA, consider bringing forward planned equipment purchases to utilize the allowance. Conversely, if you've already used your AIA for the year, it might be beneficial to delay non-essential purchases until the next accounting period.

Understanding what capital allowances videographers can claim enables smarter financial planning. Tax scenario planning tools within modern tax software allow you to model different purchasing scenarios and their tax implications before committing to investments. This proactive approach to understanding what capital allowances videographers can claim ensures you maximize tax efficiency while building your equipment inventory.

Simplifying capital allowance claims with technology

Modern tax planning software transforms the complex process of claiming capital allowances into a straightforward, automated task. Instead of manually tracking purchase dates, costs, and calculations, the software does the heavy lifting for you. It automatically categorizes eligible assets, calculates available allowances, and generates reports for your tax returns.

The software also provides deadline reminders for claims and helps with HMRC compliance by ensuring you claim correctly and maintain proper records. For videographers wondering what capital allowances they can claim, this technology provides clear, actionable insights that optimize your tax position while saving hours of administrative work.

By leveraging technology to understand what capital allowances videographers can claim, you can focus on growing your business while ensuring you receive all the tax relief you're entitled to. The combination of expert knowledge and powerful software creates a winning strategy for tax efficiency in your videography business.

What capital allowances can videographers claim?