Does capital allowance apply to the whole cost of the et?

Your machine will qualify for 20% WDA (written down allowance) every tax year on a reducing balance basis. It may also qualify for AIA (Annual Investment Allowance) and FYA (First Year Allowance) if you so elect. You can't deduct the whole cost of the machine (I'll tell you another thing at the end), but the WDA will keep reducing the cost by 20% each tax year (hence your available allowance for that tax year for that capital item) until its disposal (when you then get a balancing charge or refund depending on whether you sold it for more or less than the carried forward value) ... or depending on whether you "'de-pool''' the item, when the c/f value becomes too small (< or = 1000 pounds) you can just write it off and this amount will be available as allowance for that item. Note that you're in business, so we're talking about Trading Profits. Your 'normal' business accounts profits (Accounting Profits i.e. per your company accountant) will be adjusted for tax purposes (adding back depreciation etc), and after this, your capital allowances calculated for the year will be deducted to give the final value for Taxable Profits (relevant for tax purposes) ... this is the figure that will appear on your income Tax computation along with other income. So you can't even talk like ...""..deduct the whole cost of the machine from taxable profits.."' ... this is because at this stage (IT computation), the CA's will have already been dealt with. Brief, Taxable profits (unlike Accounting Profits) are for tax purposes, and have already considered CA's.