Capital allowances are available for two main reasons:
Firstly, accounting depreciation is not an allowable deduction for tax purposes. However, capital allowances are available instead, which give a tax deduction under rules set out by Government (this is why capital allowances are sometimes called 'tax depreciation'). Secondly, because capital allowances provide valuable tax breaks, the capital allowances system is used to provide incentives to invest in commercially and economically desirable assets. Capital allowances are a right, not a privilege and are best thought of as a reduction in the purchase price of the assets. They significantly boost the post-tax yield on an investment. In short, capital allowances are an entitlement; if you have incurred the expenditure you deserve the tax benefit.