The Writing Down Allowance is a type of capital allowance for business assets.
Capital allowances reduce taxable profits when you buy qualifying:
- Equipment
- Machinery
- Vehicles
- Other business assets
Your accounts may include depreciation for these assets. However, tax rules normally use capital allowances instead of accounting depreciation. The Writing Down Allowance uses a reducing balance method, so you can claim a percentage of the remaining tax value each year.
When to Use the Writing Down Allowance
You may use the Writing Down Allowance when another capital allowance does not cover the full cost. You may also use it after claiming only part of another available allowance.
For instance, the Annual Investment Allowance (AIA) currently covers up to £1,000,000 of qualifying expenditure. However, it does not cover business cars, gifts items or assets you owned before business use.
Moreover, businesses can claim a 40% first-year allowance on certain new main-rate assets bought from 1 January 2026.
Writing Down Allowance Rates
You normally place qualifying assets into one of three tax pools. A pool simply groups assets that use the same tax rate.
Main Pool (14%)
The main pool covers most plant and machinery; including many computers, tools and machines. The main Writing Down Allowance rate changed from 18% to 14% in April 2026.
The 14% rate started on 1 April 2026 for Corporation Tax. It started on 6 April 2026 for Income Tax.
If your accounting period crosses the change date, you may need a blended rate.
Special Rate Pool (6%)
The special rate pool uses a 6% Writing Down Allowance rate.
This pool can include:
- Integral building features (heating systems, air conditioning, water systems, lifts and electrical systems)
- Solar panels
- Thermal insulation
- Certain long-life assets
Cars with higher CO2 emissions can also enter the special rate pool.
Single Asset Pools (14% or 6%)
Sometimes, you must keep one asset in its own pool. This can apply when a sole trader or partnership uses an asset partly for private purposes. You can also choose a single pool for an eligible short-life asset. The applicable rate depends on the type of asset.
The Small Pools Allowance
Small pool rules can remove the need to carry a small balance forward.
You can claim the full remaining balance when a main or special rate pool reaches £1,000 or less. You can claim this relief instead of the normal Writing Down Allowance for that pool.
However, the £1,000 limit changes for accounting periods longer or shorter than 12 months. The relief does not apply to single asset pools.
A Short-Life Asset Election
A short-life asset election can help when you expect to dispose of an asset within eight years. You keep that asset in a separate pool instead of combining it with the main pool.
If you sell it within eight years, the tax calculation can recognise the remaining balance sooner. However, cars and private-use/special rate assets cannot normally use short-life treatment.
Companies normally have two years after the relevant accounting period to make the election. Sole traders and partnerships follow a different deadline linked to the 31 January filing date.
If you still hold the asset after eight years, you transfer the balance into the main pool.
Calculating the Writing Down Allowance
You can calculate your allowance using the following steps:
- Start with the opening balance from the previous period
- Add qualifying purchases that enter the pool
- Subtract relevant disposal values
- Apply the correct Writing Down Allowance rate
- Carry the remaining balance into the next period
For instance, assume your main pool starts at £9,000.
You add machinery costing £1,200 and subtract £200 for an asset you sold. The adjusted balance equals £10,000.
At 14%, your Writing Down Allowance equals £1,400.
Contact Us
We are not just accountants; we are Chartered Accountants with one of the most reputable and premium accounting bodies. We are registered and regulated by ACCA; so you can rest assured that you are in good hands. Knowing this, don’t hesitate to get in touch with us if you require assistance: Pi Accountancy | Contact Us
This article is for general informational purposes only and does not constitute legal or financial advice. While we aim to keep our content up to date and accurate, UK tax laws and regulations are subject to change. Please speak to an accountant or tax professional for advice tailored to your individual circumstances. Pi Accountancy accepts no responsibility for any issues arising from reliance on the information provided.