A new truck is the biggest cheque most transport businesses write all year, and the tax system hands back part of it - but how much, and how fast, depends on which capital allowance the purchase lands in. The menu has changed repeatedly in recent years, so here is the current shape, with the van-versus-car distinction that decides most of the answer.
Capital allowances are a type of tax relief: they let a business deduct some or all of the value of an item from its profits before tax. They apply to what the tax system calls plant and machinery - equipment, machinery, and business vehicles, explicitly including vans, lorries and business cars. One structural note for the smallest operators: sole traders and partnerships using the cash basis can only claim capital allowances on business cars - everything else goes through the cash basis accounts instead.
Depending on the asset, you can claim:
If an item qualifies for more than one allowance, you choose which to use - which is a real planning decision, not a formality.
Usually the value is what you paid. Two exceptions use market value instead - what you would expect to sell it for: items you owned before putting them into the business, and gifts. The van you drove personally for two years before registering the business does not get its original purchase price.
Vans and lorries are plant and machinery in the ordinary way - AIA, first-year allowances, the works. Cars are the special case: they sit in their own regime where CO2 emissions drive the rate, and the generous allowances mostly bypass them. For a transport business the practical rule is simple: genuine goods vehicles get the good menu; anything HMRC would call a car does not. That makes the van-versus-car classification of crew cabs and car-derived vans worth real money - get it wrong and a vehicle you expected to expense in year one drips through writing down allowances instead.
Day-to-day running costs, stock, and interest or finance costs on buying assets are not capital items: sole traders and partnerships claim them as business expenses, limited companies deduct them as business costs. Fuel, tyres, insurance and the HP interest all live on the revenue side; the vehicle’s capital cost lives here.
Because most allowances claim in the year of purchase, WHEN the business buys matters. A van delivered the week before the accounting year-end accelerates its relief by a full year compared with the same van delivered the week after; and the choice between allowances - full relief now against profits you already have, versus relief spread against profits you expect - can be worth more than the rate difference between them. The recent history of allowances - super-deduction era, then full expensing, now a 40% first-year allowance for post-January 2026 purchases - shows the menu itself moves with budgets, so the version of this decision that was right two years ago is not automatically right now.
And a last discipline: keep the purchase evidence with the claim - invoice, date brought into use, and the classification reasoning for anything borderline. The allowance is only as strong as the file behind it.
The truck on the yard is worth what it earns; the allowance decides how quickly the tax system agrees with what you paid for it.