Tools & Equipment — Ireland Tax Rules

Claim the cost of trade tools, machinery, and specialist equipment via capital allowances.

Claimable: Fully claimable · Tax authority: Revenue

Revenue Rules

• Tools and equipment qualify for capital allowances at 12.5% per year over 8 years.
• Small tools and consumable supplies can often be expensed directly.
• Hire or lease costs for equipment are deductible as revenue expenses.
• If equipment has personal use, claim only the business proportion.
• Replacement tools for like-for-like replacement may be expensed directly.

Limits

Capital allowances: 12.5% per year over 8 years. No cap on the number of items.

Worked Example

Oisín is a self-employed plumber. He buys €500 of hand tools (expensed directly) and a €2,000 pipe camera (capital allowances: €250/year for 8 years). He also hires a digger for €100/day for 5 days (€500, expensed directly).

Record Keeping

• Keep purchase receipts for all tools and equipment
• Maintain a fixed asset register for capital items
• Record hire agreements and rental invoices
• Note the business-use percentage for dual-use items

Frequently Asked Questions

Can I expense small tools directly?

Small consumable tools (under approximately €500) can often be treated as revenue expenses and deducted immediately. Larger items should use capital allowances.

What about renting equipment?

Rental and hire costs are fully deductible as revenue expenses in the period incurred — no capital allowances needed.

Can I claim power tools for my trade?

Yes. All tools required for your trade qualify for capital allowances or can be expensed if small and consumable.

What happens if a piece of equipment is stolen or destroyed?

If an insured item is stolen or destroyed, a balancing allowance arises for the tax written-down value not recovered by the insurance payout. If the insurance payment exceeds the tax written-down value, a balancing charge applies. Report the disposal in the year it occurs on your Form 11 fixed asset schedule.