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If you dispose of or sell an asset on which you鈥檝e claimed the super-deduction or special rate first year allowance, you must work out a balancing charge and add this to your taxable profits.

You should check what events are classed as disposals.

You must not deduct the disposal value that is included in the balancing charge from the main rate or special rate pool, as you would with a normal disposal. Find out about pools and other capital allowance rates.

Working out the balancing charge

If you have claimed the super-deduction or special rate first year allowance, you can either work out the balancing charge yourself, or you can use the online tool.

Before you start

You鈥檒l need to know the:

• type of allowance claimed
• disposal value

Depending on your circumstances, you may want to seek professional advice before including your balancing charge on your return.

Work out the balancing charge after the super-deduction has been claimed

To work out the balancing charge:

1. Work out the disposal value for the asset.

2. Work out the 鈥榬elevant proportion鈥�.

3. Multiply the disposal value by the 鈥榬elevant proportion鈥�.

4. Multiply this result by the 鈥榬elevant factor鈥� to get the balancing charge.

The portion of the disposal value not included in the balancing charge should be deducted from the main pool in the normal way.

Find out how to work out the disposal value and how much can be deducted from the pool.

Work out the 鈥榬elevant proportion鈥�

If you claimed the super-deduction for the full cost of the asset, the 鈥榬elevant proportion鈥� of the disposal value is the whole of the disposal value.

If you claimed the super-deduction for only part of the cost of the asset, you should first work out the 鈥榯otal relevant expenditure.鈥� This is the total of the expenditure on the asset:

• on which a super-deduction has been claimed (the 鈥榬elevant super-deduction expenditure鈥�)
• which has been added to a capital allowances pool
• on which another first year allowance has been claimed

To get the 鈥榬elevant proportion鈥�, divide the 鈥榬elevant super-deduction expenditure鈥� by the 鈥榯otal relevant expenditure鈥�.

Work out the relevant factor

If the disposal takes place in an accounting period ending before 1 April 2023, the 鈥榬elevant factor鈥� is 1.3.

If the accounting period begins after 1 April 2023, the 鈥榬elevant factor鈥� is 1.

If the accounting period includes 1 April 2023, the 鈥榬elevant factor鈥� is worked out using these steps:

1. Count the number of days in the accounting period before 1 April 2023.

2. Divide that number by the total number of days in the accounting period.

3. Multiply the result by 0.3.

4. Add 1 to the result.

Find .

Work out the balancing charge after the special rate first year allowance has been claimed

To work out the balancing charge:

1. Work out the disposal value for the asset.

2. Work out the 鈥榬elevant proportion鈥� of the disposal value to get the balancing charge.

The portion of the disposal value not included in the balancing charge should be deducted from your special rate pool in the normal way.

Find out how to work out the disposal value and how much can be deducted from the pool.

Work out the 鈥榬elevant proportion鈥� of the disposal value

If you鈥檝e claimed the 50% special rate first year allowance for the full cost of the asset, the 鈥榬elevant proportion鈥� of the disposal value is half of the disposal value.

If you鈥檝e claimed the allowance for only part of the cost, work out the 鈥榬elevant proportion鈥� by first working out the 鈥榯otal relevant expenditure鈥�. This is the total of expenditure on the asset:

• on which the special rate first year allowance has been claimed (the 鈥榬elevant allowance expenditure鈥�)
• which has been added to a capital allowances pool
• on which another first year allowance has been claimed

Divide the 鈥榬elevant allowance expenditure鈥� by 2. Then, divide this result by the 鈥榯otal relevant expenditure鈥� to get the 鈥榬elevant proportion鈥�.

Then, multiply the disposal value by the 鈥榬elevant proportion鈥� to get the balancing charge.

Find .