You’ll be pleased to know that there is a welcome tax benefit available to businesses when you purchase items such as security systems, CCTV and fire alarms.
Since they are all viewed by HMRC as long-term investments in plant and machinery, this means they fall under the category of capital expenditure.
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.
The upshot is that intruder alarms, access control systems, CCTV, fire alarms etc. qualify for a 100% first-year allowance, which reduces taxable profits by 20 pence in the pound. As an example, a £20,000 outlay would actually cost £16,000, after the deductions available through full expensing.
As well as providing short-term tax savings, full expensing can also offer long-term cash flow and tax planning advantages.
The qualifying period currently runs until the end of March 2026, although the Government has intimated it could become a permanent fixture.
Please note this allowance is only applicable if you buy the equipment and don’t lease it.
As an aside, installing these types of security systems can also reduce your business insurance policies.
Finally, the rules and regulations regarding capital allowances are quite complex and are always subject to change. The information that Justice Fire & Security has prepared here was accurate at the time of writing, however, you may wish to consult with your accountant for further clarification.
Capital allowances: full expensing - GOV.UK (www.gov.uk)
