Writing down allowance

A writing down allowance (WDA) lets a business deduct a percentage of the value of its plant and machinery from taxable profits each year, rather than all at once. Most assets sit in the main rate pool at 18% a year, while integral features and other special-rate items are written down at 6% a year, both on a reducing-balance basis.

Worked example

A company has £100,000 of qualifying fixtures in its special-rate pool. In year one it claims a 6% writing down allowance of £6,000. The pool falls to £94,000, and in year two it claims 6% of that, and so on, until the balance is used up.

Related: What are capital allowances?

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