Alongside this, industry data from Glenigan indicates that civil engineering activity – particularly in projects under £100m – is expected to see solid growth into 2026.

Major programmes are already moving forward, including:

• Road Investment Strategy 3 (2026–2031)
• AMP8 water investment period
• Ongoing rail and transport upgrades
• Large-scale projects such as the Lower Thames Crossing

The pipeline is visible, long-term, and meaningful for businesses across the civil engineering supply chain.

The constraint isn’t the opportunities – it’s readiness

Analysis from PwC highlights a key shift: the constraint in UK infrastructure delivery is increasingly delivery capacity rather than intent.

Plant availability, skilled operators, and the ability to mobilise quickly are now the limiting factors.

For civil engineering contractors, that creates a clear commercial reality. The businesses best positioned to win work are those that can demonstrate they are resourced and ready – not those scrambling to put funding in place after award.

Finance that matches how civil engineering works

For businesses building capacity ahead of confirmed contracts, revolving credit facilities are one of the most effective funding structures available.

An agreed funding line allows you to:

• Secure access to capital in advance
• Draw funds only when equipment is needed
• Move quickly when projects land

The result is simple: when work arrives, plant follows within days – not weeks.

And because funding is structured in advance, terms are typically stronger than last-minute arrangements made under pressure.

The AIA still works in your favour

Civil engineering plant typically qualifies for the Annual Investment Allowance (AIA) – allowing 100% tax relief on qualifying expenditure up to the current threshold.

Under Hire Purchase, this relief is available even when the asset is financed rather than purchased outright. That means:

• Preserving working capital
• While still accessing the full tax benefit

With changes to capital allowances coming into effect from April 2026, early planning of capital expenditure is becoming increasingly important.

Build your plant strategy now

The infrastructure pipeline is not a short-term spike – it’s a sustained opportunity.

The contractors who benefit most won’t be the ones reacting to it. They’ll be the ones who planned for it.

What makes First Business Finance different?

It starts with the people – One dedicated point of contact.

In a market that’s becoming increasingly process-driven, our clients value having one, knowledgeable person who knows their business and is always at the end of the phone.

We take the time to structure funding properly – so it supports how the business operates and grows.

Because getting funding isn’t the challenge.

Getting the right funding is.

Call our team to discuss any funding requirements you may have.

If you want to talk through how to structure your plant finance or any funding requirements you may have, call us on 01634 386869.

The post £700bn of Work Is Coming – Are You Ready For It? appeared first on First Business Finance.

Most don’t take full advantage of it. Some don’t know it exists. Others plan to “sort it later” and end up making rushed decisions in March.

If you have equipment, vehicles, or machinery to invest in this year, here’s what you need to know – and why the start of the tax year is the right time to think about it.

What Is the Annual Investment Allowance?

The Annual Investment Allowance (AIA) lets you deduct 100% of the cost of qualifying plant and machinery from your taxable profits – in the year you buy the asset.

The limit is £1 million per accounting period. It was confirmed at this level in the 2025 Autumn Budget and will stay there for the duration of this Parliament.

It applies to both limited companies and unincorporated businesses – sole traders and qualifying partnerships included.

In practical terms: buy a £50,000 piece of equipment this year, claim the AIA, and you reduce your taxable profits by £50,000. At the 25% corporation tax rate, that’s £12,500 back. In the same year.

What’s Changed From April 2026

The headline AIA limit hasn’t changed. But something else has.

The writing down allowance (WDA) – the relief you get on assets once the AIA limit is used up, or on older assets already in your pool – has dropped from 18% to 14% from 1 April 2026 for corporation tax, and 6 April 2026 for income tax.

For most SMEs spending well within the £1 million limit, this doesn’t change much day to day. But if you have a large historic pool of assets, or your capital spending regularly exceeds the AIA cap, your tax relief on that excess will now come through more slowly.

The practical upshot: using the AIA efficiently – claiming in the right period, on the right assets – matters more than it did before.

Finance and Tax Relief Work Together

You don’t have to buy an asset outright to claim the AIA on it.

If you acquire it through Hire Purchase, HMRC treats you as the owner from day one. That means you can claim the full AIA on the asset’s value in the year of acquisition – even though you’re paying in monthly instalments.

The interest on your HP payments is also generally tax-deductible as a business expense.

So you can protect your working capital, spread the cost, and still get the same upfront tax relief as if you’d paid for it outright. 

Why Timing Matters

The AIA must be claimed in the period the expenditure is incurred. You can’t backdate it.

That makes the start of the tax year the ideal time to plan. If you know you need a new vehicle, a piece of machinery, or a technology upgrade in the next 12 months, thinking about it now means:

•   You have time to compare finance structures properly
•   Your accountant can advise on the most tax-efficient timing relative to your year end
•   You’re not rushing a decision in January or February when your options are narrower

Businesses that plan capital investment early consistently get better terms and better tax outcomes than those that treat it as an afterthought.

A Quick Summary of the 2026/27 Position

•   AIA: £1 million per accounting period – 100% first-year relief on qualifying plant and machinery
•   Full Expensing: available to limited companies on new main pool assets, no upper limit
•   Writing Down Allowance: reduced to 14% (was 18%) from April 2026
•   New 40% First Year Allowance: available from January 2026 for unincorporated businesses and leasing arrangements
•   HP and AIA: you can claim the AIA on a hire purchase agreement – you don’t need to buy outright

As always, the right approach depends on your specific business structure, profitability, and accounting year. Speak to your accountant before making decisions.

Ready to Plan Your Investment for This Year?

At First Business Finance, we work with businesses across manufacturing, construction, commercial vehicles, IT, catering, and more – helping them find the right finance structure for the assets they need, with terms that work for their cash flow.

If you have equipment or vehicles on your list for 2026/27 and want to understand your options before committing, get in touch, we’re here to help. Call us on 01634 386869

All figures correct at time of writing (April 2026). This article is for general information only – please speak with a qualified accountant for advice specific to your business.

The post New Tax Year. Same £1 Million Annual Investment Allowance – Are You Making the Most of It? appeared first on First Business Finance.