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Tax Relief

Did you know that if you purchase a new fire alarm or security system before 31st March 2026, you can claim back 100% of Capital Outlaid on Security Systems.

Full Expensing Tax Relief Initiative On Commercial Fire Alarms & Security Systems

This government scheme is called the “Full Expensing” Tax Relief Initiative. Investment is a key driver of productivity growth but business investment has been a long-standing weakness in the UK – UK business investment accounted for 10.0% of GDP compared to the OECD average of 12.5% in 2021. The government wants to create an incentive for businesses to bring planned investments forward, therefore the Full Expensing Tax Relief Initiative was introduced.

As a business owner, it’s likely you’ll want to understand all you can about this before you invest in a new fire alarm or security system.

There’s a lot of information out there about this scheme, but much of it is full of jargon and ‘accountant speak’ and if we’re honest we were totally bamboozled trying to read it. So, now that we’ve got our heads around it, we’re going to explain to you – in a totally jargon-free way – how the “Full Expensing” Tax Relief Initiative can save you money on your fire alarm or security system.

Explaining Tax Relief

Can you explain how the tax relief works in layman’s terms?

We’re not accountants, but we’ll certainly do our best.

Thanks to what’s known as the “full expensing” tax relief initiative, introduced in Chancellor of the Exchequer Jeremy Hunt’s 2023 Spring Budget, business owners can now claim back 100% of the capital outlay on these types of investment.

For example, £500,000 spent on qualifying items would give £125,000 off a corporation tax bill for a company paying tax at 25%. The amount of expenditure that can qualify for full expensing is uncapped. 

Capital allowances can be claimed on capital expenditure. And capital expenditure is anything you buy for your business that’s classed as a long-term investment. Examples of this are property, equipment, land, computers, software, as well as fire alarms or security systems, for that matter!

Not all capital expenditure qualifies for this scheme though – just those items that come under the category of plant and machinery.

CCTV - Tax Relief

What counts as plant and machinery for tax relief purposes?

If your capital expenditure purchase meets any of these criteria, it’s classed as plant and machinery, so you can claim capital allowance on it.

  • Anything that you buy to keep in your business (including fire alarm or security systems).
  • The cost of demolishing plant and machinery.
  • Parts of a building that are considered integral. These are known as ‘integral features.’
  • Certain fixtures, for example, fitted kitchens or bathroom suites.
  • Alterations to a building to install other plant and machinery – this does not include repairs.

Buildings

What does not count as plant and machinery

The following items aren’t counted as plant and machinery, so you can’t claim capital allowance on them.

  • Buildings, including doors, gates, shutters, mains water, and gas systems.
  • Land and structures. Examples of these are bridges and roads.
  • Items that are only used for business entertainment, for example, a karaoke machine or pool table.
  • If you lease something, you can’t count it as capital expenditure. So, if you buy a fire alarm or security system you can claim the Full Expensing Tax Relief. If you lease it, you cannot.

So I can claim the Full Expensing Rate of Relief on a new business fire alarm or security system?

Yes. As long as you buy it, not if you’re planning to lease it.

Full expensing is a 100% first-year allowance which allows companies to claim a deduction from taxable profits that is equal to 100% of their qualifying expenditure in the year that expenditure is incurred.

Expenditure must be incurred on the provision of “main rate” plant or machinery on or after 1 April 2023 but before 1 April 2026.

Full expensing is available to companies subject to Corporation Tax only. Therefore, unincorporated businesses cannot claim, but such businesses are entitled to claim the AIA which offers the same benefits as full expensing for the investments it covers (up to £1 million per year).

The plant and machinery must be new and unused, must not be a car, given to the company as a gift, or bought to lease to someone else.

Expenditure on second-hand assets and those bought to lease to someone else can still qualify for the AIA.

Take advantage of the Full Expensing rate of relief to protect your business right away with a fire alarm or security system, Contact us today for a free quote.

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