Estimate accounting depreciation, Structures & Buildings Allowance, plant and machinery allowances, integral feature pools and Corporation Tax savings for UK commercial buildings, offices, shops, industrial units, warehouses, fit-outs and refurbishment projects.
Start with the calculator, then use the guide below to understand the accounting and HMRC treatment. The tool is designed for planning numbers, not a substitute for a surveyor, accountant or capital allowances specialist.
Use this tab for a commercial property purchase where you can split the cost between land, structure, main-pool plant and special-rate integral features.
Use this tab for tenant fit-out, landlord refurbishment, office conversion, restaurant fit-out, warehouse upgrade or shop refurbishment costs.
This tab compares accounting depreciation with HMRC allowances for a simplified property split. It is useful for timing differences and deferred tax planning.
Commercial property depreciation in the UK is not one single calculation. The same office, warehouse, retail unit, workshop, surgery, restaurant or industrial building normally has two parallel models: an accounting model for the financial statements and a tax model for HMRC. The accounting model records the loss in value of the building and fit-out over useful economic lives. The tax model ignores that accounting depreciation and replaces it with capital allowances, such as Structures & Buildings Allowance, Annual Investment Allowance, full expensing, first-year allowances and writing down allowances.
For accounting purposes, the starting point is to split the property into sensible components. Land is normally held at cost or valuation and is not depreciated because it has an indefinite life. The building structure is depreciated over its expected useful life, often 30 to 50 years for a modern commercial building. Plant, machinery, fixtures and fit-out are usually depreciated over shorter lives because they wear out, become obsolete, or need replacement sooner. A lift, boiler, air-conditioning system, lighting network, commercial kitchen or data installation normally has a much shorter life than the building shell.
For tax purposes, HMRC does not give relief for commercial depreciation itself. You usually add back accounting depreciation when calculating taxable profits and then claim capital allowances where the law allows. This is why a commercial property investor can show one depreciation charge in the accounts but a different tax deduction in the Corporation Tax computation. The difference is not an error: it is a timing difference created by two systems measuring the same asset in different ways.
The most important step is allocating the commercial property cost between land, structure and qualifying fixtures. A poor split can understate tax relief or create a weak audit trail. In practice, many businesses use a purchase contract, valuation report, fixed asset register, construction invoices or a specialist capital allowances survey to support the numbers. This matters most when you buy an existing commercial property, because a large part of the purchase price may relate to embedded fixtures that are not obvious from the headline price.
For example, a £2 million office building might include £400,000 of land, £1.2 million of structure, £150,000 of main-pool plant and £250,000 of integral features. The land gets no depreciation for tax. The structure may qualify for SBA at 3% if the relevant conditions are met. The main-pool plant may qualify for AIA, full expensing, the 40% main-rate first-year allowance, or 14% writing down allowance depending on the business and asset. Integral features usually fall into the 6% special rate pool unless an upfront allowance is available.
Use this table as a practical starting point when deciding which calculator fields to use.
| Component | Examples | Typical accounting treatment | 2026 tax treatment |
|---|---|---|---|
| Land | Site, yard, car park land, development land below the building | Not depreciated unless impaired | No SBA, no plant allowances and no tax depreciation |
| Main structure | Foundations, walls, roof, floors, frame, basic shell and structural works | Often straight-line over 30–50 years or 2–4% reducing balance | Structures & Buildings Allowance at 3% if qualifying |
| Main-pool plant | Qualifying plant, equipment, some fit-out and trade-specific installations | Often 10–20 years or reducing balance at 15–25% | AIA / full expensing / 40% FYA where available, otherwise 14% WDA from April 2026 |
| Integral features | Lifts, escalators, heating, cooling, electrical systems, lighting, water systems | Often 10–25 years depending on replacement cycle | Special rate pool at 6%, or AIA / special first-year allowance where available |
| Loose equipment | Furniture, computers, racking, tools, commercial kitchen equipment, machinery | Usually depreciated over a shorter useful life | Usually plant and machinery; often eligible for AIA subject to the annual limit |
| Planning point | The same invoice can contain several categories. Separate them carefully before preparing accounts or tax claims. | ||
SBA gives relief on qualifying non-residential construction, renovation and conversion expenditure at 3% per year. It is straight-line, so a £900,000 qualifying structure gives a £27,000 annual allowance before any apportionment for short accounting periods or non-qualifying use.
You must keep an allowance statement, and when the property is sold the buyer generally needs a copy to continue claiming the remaining allowance.
Qualifying plant and machinery can produce faster tax relief than SBA. Depending on the asset and business, relief may be available through AIA, full expensing, a 40% first-year allowance, or writing down allowances.
For 2026 planning, the standard main pool WDA is 14% from April 2026, while special rate expenditure remains 6%.
Commercial fit-out costs need a line-by-line review. Some works are repairs, some are capital improvements, some qualify as plant, and some only qualify for SBA. Tenant fit-outs can be especially mixed.
A shop, restaurant or office refurbishment may contain lighting, HVAC, data cabling, flooring, partitions, counters, kitchens and structural works, all with different treatment.
Assume a UK company buys a commercial office building in 2026 for £2,000,000. A valuation and capital allowances review split the cost as follows: £400,000 land, £1,200,000 structure, £150,000 main-pool plant and £250,000 special-rate integral features. The company uses 40 years for accounting depreciation on the structure and 10 years for accounting depreciation on plant and fixtures.
In the accounts, the building structure might be depreciated at £30,000 per year on a straight-line basis. The plant and fixtures might be charged at £40,000 per year if depreciated evenly over 10 years. Total accounting depreciation in year one could therefore be £70,000. This reduces accounting profit, but it is not the tax deduction.
For tax, the company may claim SBA of £36,000 per year on the £1,200,000 structure, assuming it qualifies and the correct allowance statement is held. The £150,000 main-pool plant and £250,000 integral features may be eligible for AIA or other upfront relief. If no upfront claim is made, the main pool is relieved at 14% and the special rate pool at 6% on a reducing-balance basis. If the business uses the AIA against the full £400,000 of qualifying plant and fixtures, year-one tax relief could be much higher than the accounting depreciation charge.
When a commercial property is sold, SBA claims stop for the seller. There is no normal plant-style balancing charge for SBA itself, but SBA claimed is brought into the chargeable gains computation by increasing disposal receipts for the purpose of calculating the gain or loss. For fixtures, the buyer and seller often need to deal with pooling requirements and fixtures elections, so the capital allowances position should be reviewed before completion rather than after the deal is signed.
For the most useful result, do not enter the whole property cost into one box and hope the answer will be accurate. Commercial property is a mixed asset. A realistic model starts with a cost split, then applies a different treatment to each component. Begin with the total purchase or build cost, then remove the land value. After that, separate the remaining cost between the building structure, main-pool plant, and special-rate integral features. If you only have rough planning figures, use sensible estimates first, then replace them later with a valuation, contractor breakdown or capital allowances report.
The Property Purchase tab is best when you have bought an office, warehouse, retail unit, industrial building, medical premises, workshop, hotel, storage facility or mixed commercial site. It estimates SBA on the structure and writing down allowances on plant and integral features. The Fit-Out / Refurbishment tab is better for tenant improvements, landlord works, restaurant fit-outs, shop refits, office conversions and warehouse upgrades. The Accounts vs Tax tab helps you compare the expense shown in your profit and loss account with the deduction used in your tax computation.
Land should be kept separate because it normally has an indefinite useful life. It is not depreciated in standard UK accounting policies and it does not qualify for SBA. In cities and high-demand commercial locations, land can form a large part of the purchase price. If you ignore land and treat the entire purchase price as building cost, your depreciation and allowance estimates may be overstated.
The structure is the shell of the building: foundations, walls, roof, floors and basic structural fabric. Fixtures and plant are the systems and assets that make the building usable for a trade or property business. These can include lifts, heating, air-conditioning, water systems, electrical systems, lighting, specialist ventilation, commercial kitchen equipment, data cabling, racking, machinery and some fitted installations. A detailed review is often worthwhile because fixtures usually produce faster tax relief than SBA.
For accounts, depreciation should reflect the expected pattern of economic benefit. Many UK businesses use straight-line depreciation for buildings because it is simple and consistent. A modern building may use 40 or 50 years, while older premises or buildings due for redevelopment may use a shorter life. Plant and fit-out usually use shorter lives because those items are replaced more frequently. The policy should be consistent across similar assets and reviewed when conditions change.
For tax, the calculator applies statutory allowance rates rather than accounting depreciation. SBA is calculated at 3% on qualifying structure cost. Main-pool plant uses 14% writing down allowance from April 2026 if no upfront allowance is entered. Special-rate integral features use 6%. Where you expect AIA, full expensing or first-year allowance treatment, enter the upfront amount in the Year 1 allowance field so the remaining pool is reduced before WDA is calculated.
Avoid these errors when building your commercial property depreciation schedule or capital allowances claim.
A property purchase price often includes land, structure, fixtures, legal costs and sometimes goodwill or business assets. Land is not depreciated and should not be included in SBA. A single-line treatment can distort both accounts and tax planning.
Many valuable qualifying assets are built into the building. Heating systems, air-conditioning, lifts, electrical systems and lighting are easy to miss if the property is only reviewed as bricks and mortar. This can delay tax relief unnecessarily.
Repairs may be revenue expenses, while improvements are capital. A refurbishment can contain both. Replacing a damaged item like-for-like is different from upgrading, extending or creating a new asset. The correct classification affects both profit and tax.
For 2026 planning, the main pool writing down allowance changes to 14% from April 2026. Existing spreadsheets and older website examples may still use 18%, so check the date and rate before relying on the result.
SBA claims need proper supporting information. If you buy or sell a property, the allowance statement helps the new owner understand the qualifying expenditure and remaining allowance period. Missing records can make future claims harder.
A capital allowance reduces taxable profits; it is not a cash grant. The cash value depends on your tax rate and whether the business has enough taxable profit to use the deduction. Timing matters just as much as the headline allowance.
Use these links to connect this page with your wider depreciation and tax content hub.
Answers to common UK questions about commercial buildings, fixtures, SBA, WDA, AIA and accounting depreciation.