Picture this. You have just driven a brand new van off the forecourt, or finally kitted out the workshop with a proper set of tools and a bench that will still be standing in ten years. It feels good. It also feels expensive. And somewhere in the back of your mind is a nagging question: how much of this can I actually get back against my tax bill?
Here’s the thing. Most plumbing and heating business owners spend thousands every year on vans, tools and equipment, and a good number quietly leave money on the table because they never claim the full relief they are entitled to. Not their fault. Nobody ever sat them down and explained it in plain English, so let me do that now.
What capital allowances actually are
When you buy the everyday bits that get used up on a job, a bag of fittings, some flux, a length of pipe, you knock the cost straight off your profit as a running expense. But something that lasts for years, a van, a pressing tool, a laptop for the office, is treated differently. You cannot usually write the whole lot off as a day to day cost. Instead you claim what are called capital allowances.
In plain terms, capital allowances are how you get tax relief on the lasting kit your business buys. They reduce the profit you pay tax on, so your tax bill comes down. And a lot of the time, as you will see, you get the whole cost in one hit.
The Annual Investment Allowance: your main tool
The workhorse here is the Annual Investment Allowance, or AIA. It lets you deduct the full value of most qualifying kit from your profits in the year you buy it, and the AIA amount is one million pounds a year.
Read that again. One million pounds. That is far more than almost any plumbing and heating business will spend on equipment in a single year, so in practice you can write off the full cost of your tools, your commercial van and your workshop fit out in the same year you buy them. The full amount, straight against this year’s profit.
There are a couple of things AIA does not stretch to. You cannot claim it on cars, or on something you already owned personally and then brought into the business. Cars are the big one to remember, and I will come back to them because they matter more to our trade than you might think.
Full expensing: an extra route for limited companies
If you run your business through a limited company, there is a second route called full expensing. It lets a company deduct 100 per cent of the cost of qualifying plant and machinery in the year it is bought, as long as the item is new and unused and was bought on or after 1 April 2023. Cars are excluded from this one too.
For most trade businesses the practical effect is the same: buy the kit, claim the cost, pay less tax. If you are a sole trader or a partnership, AIA is your route. If you are a limited company, you have both, and a good accountant will point you at whichever fits your year best.
Your van is the workhorse, and the tax rules treat it kindly
A genuine commercial van, the kind you fit out with racking and drive to jobs, counts as plant and machinery. So you can claim the full cost through AIA or full expensing in the year you buy it, subject to how much you use it for business.
A car is a very different story. Cars do not qualify for AIA or full expensing at all. Instead you claim relief slowly, a small percentage of the value each year through what are called writing down allowances. So the line between a van and a car is not a technicality. It is the difference between getting your relief now and getting it over the best part of a decade.
The double cab pickup trap has changed
Now for the part that catches people out, and it is a live one. A lot of you drive a double cab pickup. The Ranger, the Hilux and the L200 are everywhere on our sites, and for years the tax rules treated most of them as vans if the payload was one tonne or more. That has changed. From 6 April 2025, HMRC no longer treats most double cab pickups as vans for benefit in kind, and the same shift took effect from 1 April 2025 for capital allowances. So a new double cab pickup bought today is likely to be treated as a car: no AIA, the slow writing down route instead, and if a team member has private use of it, a bigger benefit in kind bill too.
There is a saving grace. If you bought, leased or ordered your pickup before 6 April 2025, you can keep the old van treatment until the earliest of three points: when you dispose of it, when the lease ends, or 5 April 2029. So the one on your drive is very likely fine for now, and it is the next one to think about. If the tax treatment matters to you, a proper panel van still gets the generous treatment a double cab pickup no longer does, and that is worth a five minute conversation before you sign, not after.
Timing is quietly powerful
One more point that costs nothing but earns you plenty: you claim the relief in the accounting period in which you buy the asset or bring it into use. So the date on the invoice matters, especially near your year end. Consider this. If you are going to buy a new van or a pricey bit of kit anyway, bringing the purchase forward a few weeks, or holding it back, can move the relief into the year where it does you the most good. It is the same money either way, and the timing is what you control.
Why this is an opportunity, not a headache
It is easy to read all this as another set of rules to trip over. In my eyes it is the opposite. Every reliable van, every tool that lets you work faster, every system that saves your office team an hour a day is an investment in a business that grows, and the tax relief is the government sharing the cost with you. The owners who get this stop seeing a new van as money leaving the account and start seeing it as money working, which is a healthier and usually more profitable way to run a business.
Where this thinking comes from
This is the same mindset that runs through the books I have written for our trade. In The Quote Handbook the whole point is pricing your work to protect your margin, because a healthy margin is what lets you afford good vans and good tools in the first place. In The Systems Handbook I show how to build a business that runs on systems rather than on you, so investing in the right kit frees you up instead of tying you down.
How Together We Count can help
We are accountants for trades businesses, so we spend our days helping plumbing and heating owners keep more of what they earn. Claiming your capital allowances properly, timing a purchase to land in the right year, and steering clear of the double cab pickup trap are exactly what we sort for clients before it costs them. If you would like a hand making sure your next big buy works as hard for your tax bill as it does for your business, take a look at our services page.
Frequently asked questions
Can I claim the full cost of a new van in one year?
Usually yes. A genuine commercial van counts as plant and machinery, so you can claim the full cost through the Annual Investment Allowance, or through full expensing if you are a limited company, in the year you buy it. A sole trader who also uses the van privately would restrict the claim to the business share of the use.
Are tools and equipment covered too?
They are. Pressing tools, power flushing machines, test kit, workshop benches, office computers and similar lasting items all count as plant and machinery and qualify for the Annual Investment Allowance.
I drive a double cab pickup. What has actually changed?
From 6 April 2025 most double cab pickups are treated as cars for benefit in kind, and from 1 April 2025 for capital allowances, rather than as vans. If you bought, leased or ordered yours before 6 April 2025 you can keep the old van treatment until the earlier of disposal, lease expiry or 5 April 2029. A new one bought now will generally be treated as a car.
Does it matter whether I am a sole trader or a limited company?
Both can use the Annual Investment Allowance. Full expensing is only for limited companies. The right choice depends on your profits, your year end and your plans, which is worth a quick chat with your accountant rather than a guess.
A quick note
This article is general guidance for plumbing and heating business owners, not tailored tax advice for your situation. Tax rules change and the right answer depends on your circumstances, so please speak to a professional before deciding. Figures quoted here were correct at the time of writing.
Aaron McLeish, Managing Director