Capital allowances are claimed by businesses' when they purchase capital equipment, (such as plant, vehicles, office equiment, machinery).
If the assets are wholly for business and the total spend is less than the annual investment allowance (currently £200,000 per annum), then the expenditure is deducted in full from the accounting profit to arrive at the taxable profit.
Therefore, timing of asset acquisition is key.
For example, if you prepare your accounts to 31 December, acquiring an asset worth £50K on 29th December rather than on 2nd January, would save you tax at your marginal rate (20% or 40%) on the £50K. The tax saving is received twelve months earlier.
If you would like to discuss capital allowances and the best time to buy fixed assets, get in touch.