UK Tax Incentive

Full Expensing: 25% of your solar capex back in year one.

Full Expensing lets UK companies deduct 100% of qualifying plant and machinery capex, including commercial solar PV, from taxable profits in the year of purchase. At the 25% main rate of Corporation Tax, that's a quarter of your system cost back inside 12 months.

Worked example

A £400,000 rooftop solar system installed by a profitable UK Ltd:

Gross capex
£400,000
Deducted from taxable profit
£400,000
Corporation Tax relief (25%)
£100,000
Effective net capex
£300,000

Eligibility checklist

  • UK company subject to Corporation Tax (not sole traders or partnerships).
  • New and unused plant and machinery - solar PV qualifies.
  • Purchased outright, not leased (lessor claims the relief on operating leases).
  • Sufficient taxable profits in the year of claim to absorb the deduction.
  • Expenditure incurred on or after 1 April 2023 (now permanent).

Timing that matters

The deduction is claimed in the accounting period the expenditure is incurred. If you commission a system in month 11 of your financial year, the tax relief lands in that year's return, not the next.

This page is a plain-English summary, not tax advice. Always confirm eligibility and treatment with your accountant or tax adviser before committing capex.

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