Office furniture

Conditions

1. The furniture must be for business use.
2. Furniture is normally capital expenditure, claimed through capital allowances rather than as a day-to-day running cost. HMRC's test for a tangible asset is its economic life: where that life is less than one year, expenditure on it should be accepted as being of a revenue nature (BIM35415). Desks, chairs, shelving and storage bought for an office last well beyond a year, so they are capital; consumable items that will not last a year are not.
3. For a sole trader or partnership, private use restricts the claim to the business proportion: the capital allowances claimed are reduced by the amount the asset is used outside the business.
4. Furniture is main-rate plant and machinery, so the same capital-allowances rules apply: the £1 million Annual Investment Allowance gives most small businesses full relief in the year of purchase, and HMRC's manual lists 'all kinds of office furniture and equipment' as an example of AIA-qualifying expenditure. A 40% first-year allowance is available for qualifying expenditure incurred on or after 1 January 2026 on plant or machinery that is new and unused and is not special rate expenditure, for businesses within the charge to Corporation Tax or Income Tax alike. Expenditure on a car does not qualify, and the other general exclusions from first-year allowances in section 46(2) CAA 2001 apply, although the exclusion for plant or machinery provided for leasing is disapplied for the 40% FYA in certain circumstances. The main-pool writing-down rate on any remaining balance fell from 18% to 14% for chargeable periods beginning on or after 1 April 2026 for Corporation Tax and 6 April 2026 for Income Tax, with a hybrid rate for a chargeable period that begins before, and ends on or after, those dates.
5. Employees can in principle claim capital allowances on equipment they buy for their job, but the test is a demanding one and most employees will not meet it. Section 36(1)(b) CAA 2001 gives allowances only where the plant or machinery is necessarily provided for use in the performance of the duties of the employment or office, which is an objective test of what the duties themselves require. EIM36550 states both sides of that test. An item bought as a matter of choice simply because the employee wishes to go about their job in a particular way will not have been 'necessarily provided'. HMRC then qualifies that in two steps. First: 'you should take care when applying this reasoning to situations where the employee's duties are only vaguely defined'. Second: 'This is particularly so when the equipment purchased represents a more up to date method of carrying out existing tasks which are a necessary part of the duties.' The concession follows: 'In that case, the employee can exercise some element of choice in deciding how to go about those tasks without foregoing the entitlement to allowances.' Whether 'In that case' picks up both steps or only the first is not resolvable from the page, so do not read vaguely defined duties as sufficient on their own — on the narrower reading the equipment must also be a more up to date method of doing existing tasks the duties already require. HMRC's guidance is that an employer will usually provide any necessary equipment where an employee is expected to work from home, but that exceptionally there may be cases where the employee provides the equipment and can claim an AIA (CA23082). On the employer's position, HMRC's manual addresses two cases. Where the employer is willing to provide the item or pay for it, it will not have been necessarily provided by the employee (EIM36540). Where the employer is not prepared to bear the cost and advances the view that the expense is not considered necessary, that clearly weakens the taxpayer's claim, though without being entirely conclusive (EIM36560). Where an employee does qualify, CA23082 makes the claim subject to two further sets of rules. The capital allowances contributions rules apply 'in cases where the employer in fact meets the expenditure either directly or indirectly'. HMRC states the position there as a general rule: 'the contribution is deducted from the expenditure and the person gets capital allowances on the net amount', and 'There are exceptions to this general rule' (CA14100). The statute frames it the same way — section 532(1) CAA 2001 gives the general rule, and section 532(4) makes it 'subject to the exceptions in sections 534 to 536', which HMRC lists as three: Northern Ireland regional development grants (up to 31 March 2003), insurance and compensation, and contributions made by persons other than public bodies who cannot get tax relief (CA14200). The rules about non-qualifying use apply as well, and CA23087 is where HMRC sets them out. Two of the restrictions it lists can reach an employee who has bought equipment for work. One is incurring expenditure on plant or machinery provided or used partly for other purposes, which reduces any annual investment allowance or first-year allowance to a just and reasonable amount (section 205 CAA 2001) — the private-use condition below. The other is receiving, or being likely to receive, a partial depreciation subsidy: a sum payable directly or indirectly to a person who has incurred qualifying expenditure for the purposes of a qualifying activity, in respect of or taking account of part of the depreciation of the plant or machinery resulting from its use for that activity, and not falling to be taken into account as that person's income (section 209 CAA 2001). Where one is payable, the annual investment allowance or first-year allowance is reduced to a just and reasonable amount (section 210 CAA 2001), the expenditure goes into a single asset pool (section 211 CAA 2001), and writing-down allowances, balancing allowances and balancing charges are each reduced on that basis (section 212(2) CAA 2001, CA27500). None of these is an alternative to the others: an employee who both uses the equipment privately and receives a subsidy is within section 205 and section 210 alike. HMRC works the subsidy case through at CA23087 — an employee who works from home whose employer pays a partial depreciation subsidy towards equipment she bought for her work.
6. On private use, the two HMRC sources state the position as follows. GOV.UK's employee guidance: you can only claim tax relief for equipment expenses if you need it to do your job and you use the equipment for work and there's no significant private use. HMRC's Employment Income Manual: the plant or machinery does not have to be 'wholly and exclusively' used for the performance of the duties, and if there is private use the allowances can be apportioned (EIM36540), on a 'just and reasonable' basis having regard to all the circumstances, principally the actual use made of the item in the year of assessment (EIM36570). The capital allowances legislation states the same basis: where a person has incurred expenditure on the provision of plant or machinery partly for the purposes of the qualifying activity and partly for other purposes, any annual investment allowance or first-year allowance must be reduced to an amount which is just and reasonable having regard to the relevant circumstances (section 205 CAA 2001, CA23087).

Common mistakes

• Treating furniture as an everyday expense when it is a capital item.
• Claiming the full cost of furniture also used by the household.
• Assuming that any private use of a desk or chair rules an employee's claim out entirely — the capital allowances legislation provides for apportionment rather than refusal.

What to keep

• Purchase invoices.
• A note of business-use proportion where relevant.
• For an employee claim, evidence of what the duties require and of the employer's response to a request to provide or pay for the item.

Real-world example

A home-based sole trader buys an ergonomic desk and chair used solely for work. The cost is claimed through capital allowances.

Frequently asked

Related allowances