EIM36915 - Deductions from earnings: capital allowances: example: writing down allowance: restriction of allowance in year employment begins
A maintenance engineer takes up employment in Birmingham on 6 October 2008. On 6 January 2010, after three months training, the engineer buys equipment for use in the performance of the duties of the employment. The equipment cost 拢6,500 and is used wholly for business purposes.
He elects not to claim Annual Investment Allowance. Writing down allowances may be claimed as follows:
| 听 | 拢 | 听 |
|---|---|---|
| 2008/09 | Cost | 6,500 |
| 听 | Writing down allowance (restricted, see EIM36650) | 听 |
| 听 | 6/12 x 20% of 拢6500 = | 650 |
| 听 | Residual value carried forward | 5,850 |
| 200//10 | Writing down allowance | 听 |
| 听 | 20% of 拢5,850 = | 1,170 |
| 听 | Residual value carried forward | 4,680 |
Note that the writing down allowance is restricted by reference to the date when the employment began, not the date when the car was bought.