Look, I’m going to let you in on something that absolutely drives me up the wall. After 15 years running Accountant in Dublin (ACCA qualified since 2008, CTA certified in 2011), I still see brilliant business owners leaving thousands—sometimes tens of thousands—of euros on the table every single year. And for what? Because capital allowances sound about as exciting as watching paint dry on a rainy Tuesday in Tallaght.
But here’s the thing: I’ve literally watched a client’s jaw drop when we found €19,000 in unclaimed allowances from their office renovation back in March 2023. That’s not pocket change, folks. That’s a decent car, a family holiday to the Maldives, or—let’s be real here—enough to keep the lights on during a rough quarter.
What the Hell Are Capital Allowances Anyway?
Right, let’s cut through the jargon. Capital allowances are basically the government’s way of saying, “Fair play, you spent money on your business, so we’ll let you knock some of that off your tax bill.” It’s like getting a discount voucher for being a responsible business owner, except most people forget to use it.
According to Revenue’s official guidance on capital allowances, these allowances are designed to give tax relief for the depreciation of capital assets used in your trade.
Think of it this way: When you buy a laptop for your business, it doesn’t just magically stop working after one year, does it? (Well, unless you spill your flat white on it like I did last month—don’t ask.) The laptop loses value over time, and capital allowances let you claim that depreciation against your taxes.
Simple? Yes. Boring? Also yes. Worth thousands of euros? ABSOLUTELY YES.
The Big Opportunities for Irish SMEs in 2025
Now, with Budget 2025 fresh off the press (October was a busy month, wasn’t it?), there are some juicy opportunities you need to know about:
- Energy-Efficient Equipment (The Green Gold Rush)
Remember when everyone thought solar panels were just for hippies? Well, who’s laughing now? If you’re investing in energy-efficient equipment, you can claim 100% Accelerated Capital Allowances (ACA) in year one. That’s right—the ENTIRE cost comes off your tax bill immediately.
I had a client who runs a small manufacturing firm in Finglas. They installed new LED lighting and energy-efficient heating in September 2023. Total spend? €45,000. Tax saved? Over €5,600 in the first year alone. The guy nearly hugged me. (He didn’t, thankfully—we’re accountants, not therapists.)
For the full list of qualifying energy-efficient equipment, check out SEAI’s Accelerated Capital Allowance scheme.
- The Double Cab Pick-Up Shake-Up
Here’s where things get a bit mental. From April 2025, those double cab pick-ups (DCPUs) that every builder and their cousin drives? They’re being treated as cars for tax purposes. If you’re thinking of getting one, BUY IT NOW. Seriously, before April 2025, or you’ll miss out on the commercial vehicle treatment.
I can already hear the groans from construction sites across Dublin…
- Vehicle Emission Changes (Coming 2027)
Okay, this one’s a bit down the road, but if you’re planning to buy company vehicles, listen up. From January 2027, the CO2 thresholds for claiming capital allowances on business cars are changing:
- 0-120g/km CO2: €24,000 allowable
- 121-140g/km CO2: Only €12,000 allowable
Translation? That gas-guzzling BMW might cost you more than just petrol money.
The Mistakes That Make Me Want to Bang My Head Against My Desk
After a decade and a half in this game, I’ve seen it all. But these mistakes? They’re like watching someone leave their winning lottery ticket in their jeans pocket before doing the wash.
Mistake #1: “My Regular Accountant Handles All That”
No offense to general accountants (some of my best friends are accountants—wait, that’s all my friends), but claiming capital allowances on property is like performing surgery. You wouldn’t ask your GP to do heart surgery, would you?
Most accountants will claim for your computers, desks, and maybe your company car. But what about:
- That new shop fit-out?
- The warehouse extension?
- The fancy air conditioning system?
- Those security cameras you installed after… the incident?
These are where the REAL money is hiding.
Mistake #2: The “It’s Just Part of the Building” Fallacy
This one kills me. I visited a hotel owner in Kilkenny in February 2024 who’d spent €2.8 million on renovations. His accountant had claimed… wait for it… NOTHING. Why? “It’s all just part of the building.”
Facepalm
We went through the invoices like detectives at a crime scene. Found €1.2 million in qualifying plant and machinery. That’s a tax saving of €150,000. The hotel owner? Let’s just say the bar tab that night was impressive.
Revenue’s own Tax and Duty Manual clearly states that many fixtures can qualify as plant—but you need to know what to look for.
Mistake #3: The Fixed Asset Register Fantasy
“But it’s on my fixed asset register!”
Ah, bless. Your fixed asset register is for accounting depreciation. Capital allowances are a whole different beast. It’s like comparing your Tesco Clubcard to your passport—both cards, vastly different purposes.
Mistake #4: Missing the Invisible Stuff
Here’s where it gets interesting. You know what most people miss? The stuff you can’t see:
- Electrical installations
- Plumbing systems
- Data cabling
- HVAC systems
- Fire safety equipment
One manufacturing client in Cork (December 2022 case) thought they had no claims because “we didn’t buy any new machines.” Turned out they’d rewired the entire factory. €380,000 in qualifying expenditure. Nearly €50,000 in tax relief.
The lesson? Sometimes the best opportunities are hiding in your walls. (Not literally—please don’t start tearing down walls looking for tax relief.)
Real Stories from the Trenches
Let me share some war stories (with names changed to protect the financially fortunate):
The Restaurant Revelation
Sarah runs a trendy restaurant in Temple Bar. (You know the type—exposed brick, Edison bulbs, cocktails in jam jars.) She spent €180,000 on the fit-out in April 2023 and claimed… €15,000 for kitchen equipment.
We did a proper review. Found:
- €45,000 in qualifying fixtures
- €28,000 in specialist lighting
- €22,000 in ventilation systems
- €15,000 in security and fire systems
Total additional claim: €110,000. Tax saved: €13,750.
Sarah’s reaction? “I could’ve hired another chef with that money!” (She didn’t. She went to Santorini. Fair play to her.)
The Tech Start-Up Surprise
A tech company in the Docklands moved into new offices in January 2024. Boring corporate fit-out, right? WRONG.
They’d installed:
- Motion-sensor lighting (energy efficient = 100% ACA)
- Specialized server room cooling
- Acoustic pods for calls
- Adjustable standing desks
Original claim by their accountant: €25,000 Our revised claim: €167,000 Additional tax saved: €17,750
The CEO’s response? “This is literally more than we raised in our first funding round.”
The Retail Chain Reality Check
This one hurt to see. A clothing retailer with 8 stores across Ireland. They’d been in business since 2012, refurbishing stores every 3-4 years. Total capital allowances claimed in 12 years? Zero. ZERO!
We went back through 4 years of records (that’s as far as Revenue allows under Section 865 of the Taxes Consolidation Act 1997). Found €2.3 million in unclaimed allowances across all stores. Even with the 4-year restriction, we clawed back €420,000 in tax relief in October 2023.
The owner’s exact words: “I think I need a whiskey. Make it a double.”
How to Actually Claim These Allowances (Without Losing Your Mind)
Right, enough horror stories. Let’s talk solutions. Here’s your game plan:
Step 1: The Reality Check
First, ask yourself:
- Have you spent money on property in the last 4 years?
- Did you buy, build, extend, or refurbish?
- Do you have plant, machinery, or equipment?
If you answered yes to any of these, keep reading. If you answered no to all of them, either you’re lying or you’re not really running a business. (Harsh? Maybe. True? Definitely.)
Step 2: The Document Hunt
You’ll need:
- Purchase contracts
- Invoices (detailed ones, not just “Building work: €500,000”)
- Architect drawings
- Engineer reports
- Photos (before and after)
Pro tip: If your builder’s invoice just says “refurbishment,” go back and get a breakdown. Threaten to withhold the final payment if necessary. (Kidding. Sort of.)
Step 3: The Classification Game
This is where it gets technical. You need to classify expenditure into:
- Plant & Machinery (12.5% per year over 8 years)
- Industrial Buildings (4% per year over 25 years)
- Energy Efficient Equipment (100% in year one)
- Boring Building Stuff (0% – sad face)
Warning: This is NOT a DIY job. I’ve seen people classify toilets as “water processing plant.” Revenue was not amused.
Step 4: The Claim Process
File the claims with your corporation tax return. But here’s the kicker—you need to be able to justify every. single. euro. Revenue loves to audit capital allowances claims. It’s like their favorite hobby, right after making our lives difficult.
The 2025 Budget Update: What’s New?
Let’s talk about what’s fresh off the Government’s printing press:
VAT Registration Thresholds Are Up!
From January 2025:
- Goods: €85,000 (up from €75,000)
- Services: €42,500 (up from €37,500)
This means more breathing room before you have to start dealing with VAT. Although, between you and me, voluntary VAT registration can sometimes work in your favor. (But that’s a conversation for another day.)
R&D Tax Credit Enhancement
The first-year payment threshold jumped from €50,000 to €75,000. If you’re doing anything remotely innovative, this is massive. And no, “innovative” doesn’t mean your revolutionary new way of making coffee. (Though if you’ve figured out how to make good coffee in an Irish office, please call me immediately.)
The Carbon Tax Creep
Carbon tax is going up from €56 to €63.50 per tonne. Not directly capital allowances, but it makes those energy-efficient equipment investments even more attractive. See how everything connects? It’s like a beautiful, tax-efficient puzzle.
Common Questions I Get (Usually After the Second Pint)
“Can I claim for my home office?”
If you’re using part of your home exclusively for business, potentially yes. But “exclusively” means EXCLUSIVELY. Not “mostly for business but sometimes the kids do homework there.” Revenue has trust issues.
“What about leased equipment?”
Still claimable! You don’t need to own it. If you’re using it for your trade and paying for it, you can likely claim. This includes most equipment leases and some property situations.
“How far back can I go?”
Four years. That’s it. Every year you wait is literally money down the drain. It’s like having a winning scratch card that expires.
“What if I get it wrong?”
This is why you need specialists. Get it wrong and you could face:
- Repaying the tax
- Interest charges
- Penalties
- The List of Shame (tax defaulters list)
Not worth the risk for DIY glory.
The Hidden Opportunities Nobody Talks About
Here’s some insider knowledge:
Intangible Assets
Software, patents, trademarks—these qualify too under Section 291A TCA 1997. I had a client in June 2023 who bought customer lists as part of a business acquisition. €200,000 worth. Their accountant missed it completely. That’s €25,000 in tax relief just… ignored.
Pre-Trading Expenses
Starting a new business? Expenses from up to 3 years before you start trading can qualify. That market research trip to Germany? Could be claimable. (The beer festival attendance? Probably not.)
Connected Party Transactions
Buying assets from a connected company? Still potentially claimable, but the rules are trickier than a Rubik’s Cube after five pints.
Your Action Plan (Do This NOW)
- Today: Look at your fixed asset register. If it’s more than one page, you’re probably missing claims.
- This Week: Gather your property purchase/refurbishment documents from the last 4 years.
- This Month: Get a capital allowances review. Seriously. The initial review is often free (we do them at no cost because we know we’ll find something).
- Before April 2025: If you need a commercial vehicle, buy it now. The rules are changing, and not in your favor.
- Ongoing: Every time you spend money on property or equipment, ask: “Can I claim capital allowances on this?” Make it a reflex, like checking your phone or complaining about the weather.
The Bottom Line (The Only Line That Matters)
Look, I get it. Tax is boring. Capital allowances are even more boring. But you know what’s not boring? Having an extra €10,000, €50,000, or even €100,000 in your bank account.
I’ve seen too many smart business owners miss out on legitimate tax relief because they thought it was too complicated or their regular accountant had it covered. Don’t be one of them.
The money is there. The rules are (relatively) clear. The savings are real.
So here’s my challenge: Stop leaving money on the table. Stop assuming it’s handled. Stop thinking it’s too complicated.
Start claiming what’s yours.
Because at the end of the day, it’s not about the tax savings—it’s about what you can do with that money. Hire more staff. Upgrade equipment. Expand to new markets. Or yes, take that holiday to Santorini.
Your business. Your money. Your choice.
Just make sure you’re not choosing to give Revenue more than they deserve. They’ve got plenty already, trust me.
Remember: This guide is based on current Irish tax legislation as of 2025. Tax rules change faster than Dublin weather, so always get professional advice for your specific situation. And no, your mate Dave who “knows about tax” doesn’t count as professional advice.
Want to find out what you’re missing? Accountant in Dublin offers free initial capital allowances reviews for Irish SMEs. Because finding money you didn’t know you had? That’s the kind of surprise we can all get behind.