Capital expenditure is money you spend acquiring, creating or improving something your business will keep and use over the long term — machinery, vehicles, equipment, premises, fixtures. It is treated differently from day-to-day running costs: you cannot normally deduct it straight from profit as an expense.
The distinction matters because it drives your accounts and your tax computation. Revenue expenditure — fuel, wages, insurance, repairs, consumables — is written off against profit in the period it arises. Capital expenditure goes onto the balance sheet as an asset, is depreciated in your accounts, and is relieved for tax through the capital allowances system instead.
The dividing line is not always obvious. Repairing an existing machine to keep it working is usually revenue. Replacing it, or upgrading it so it does more than it did before, tends to be capital. Software, professional fees, installation costs and building works all have their own treatment, and the answer can depend on what exactly was done rather than what the invoice says.
Capital expenditure is also where asset finance normally sits. Hire purchase, lease purchase, leasing and contract hire are all ways of paying for capital items over time rather than out of cash reserves, and the funding route you pick affects whether you claim capital allowances or deduct rentals. We can explain how each agreement type works; your accountant should confirm how it lands in your accounts and your tax return.
This is general information, not tax advice. Confirm your own position with your accountant or HMRC.