Full Expensing for office solar capex

Full Expensing was introduced in March 2023 as a temporary measure and made permanent in 2024. For limited companies (not partnerships or sole traders), it provides a 100% first-year deduction on qualifying main-pool plant and machinery, and a 50% first-year deduction on special-rate pool assets.

Solar PV typically falls into the special-rate pool — meaning Full Expensing delivers a 50% deduction in year one with 6% writing-down allowance thereafter. For a £300,000 office solar install at 25% corporation tax, FE delivers £37,500 of year-one tax relief, with further relief tapering over subsequent years.

For most UK office solar projects, AIA is more valuable than FE because (a) the 100% deduction is stronger than FE's 50% on special-rate pool, and (b) AIA can be claimed alongside other reliefs. Limited companies typically only use FE when their £1m AIA allowance is exhausted by other purchases in the same year.

Combined AIA + FE strategy: for businesses with multiple major capex purchases, the optimal stack is to apply AIA to the highest-relief assets (typically equipment with shorter writing-down lives) and FE to remaining assets. We work with your tax adviser to confirm the optimal claim strategy as part of the proposal.