Work out your writing down allowances
Work out what you can claim
What you can claim under writing down allowances depends on what 鈥榩ool鈥� you put an asset in. Each pool has a different rate.
Work out your allowance
Work out what you can claim separately for each pool.
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Take your closing balance from your last accounting period.
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Add the value of anything you鈥檝e bought or been given in the current period that qualifies for this pool. Only include VAT if you鈥檙e not VAT registered.
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Deduct the value of anything you sold or 鈥榙isposed of鈥� that originally qualified for this pool.
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Work out how much you can claim using the correct rate for that pool.
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Deduct the amount you can claim from the pool to get the closing balance. This is known as the 鈥榯ax written down value鈥�.
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Use the amount left in each pool as the opening balance for the next accounting period.
Example
The opening balance in your main pool is 拢9,000. You buy a machine worth 拢1,200. The total for this pool is then 拢10,200 (拢9,000 plus 拢1,200).
You sell a desk for 拢200. The total for this pool is then 拢10,000 (拢10,200 minus 拢200).
Apply the rate for the main pool (18%). The amount you can claim for this pool in this period is 拢1,800 (18% of 拢10,000).
The rest (拢8,200) is your closing balance or tax written down value. This is carried over and becomes your opening balance in this pool for your next accounting period.
Items you use outside your business
For items that are in a single asset pool because you鈥檝e used them outside your business, reduce the amount you can claim by the amount you use them privately.
You still deduct the full amount from your pool to get the closing balance.
Example
You have a single asset pool for a car that qualifies for the main rate (18%). The opening balance is 拢10,000. You use the car for your family for half the time.
If you did not use it outside your business, you could鈥檝e claimed 拢1,800 (18% of 拢10,000) for the car. Because you use it for your family half the time, you can only claim 拢900 (half of 拢1,800).
You still deduct the full amount of capital allowances (拢1,800) from your balance - even though you can only claim half of them (拢900) on your tax return.
The closing balance in this pool is 拢8,200 (拢10,000 minus 拢1,800). This is the starting balance for the next year.
Items you use privately that are not in a single asset pool
If you start using something outside your business that you鈥檝e already claimed capital allowances on:
- add the market value of the item (the amount you鈥檇 expect to sell it for) to a single asset pool
- deduct the same amount from the pool it was in
If the amount you deduct is more than the balance in the pool, the difference is a 鈥榖alancing charge鈥� - you must put it on your tax return.
Claiming less than you鈥檙e entitled to
You do not have to claim the full amount you鈥檙e entitled to. If you only claim part, the rest stays in your closing balance.
If you have 拢1,000 or less in your pool
You can claim the full amount if the balance in your main or special rate pool is 拢1,000 or less before you work out your allowance.
This is called a small pools allowance. It does not apply to single asset pools. You can either claim a small pools allowance or writing down allowances - you cannot claim both.
This amount is adjusted if your accounting period is more or less than 12 months.
For example, if your accounting period is 9 months the limit will be 9/12 x 拢1,000 = 拢750.
How to claim
Claim on your tax return.