CA23220 - PMA: WDA & balancing adjustments: Rate of WDA

Section 56 CAA01

Main rate WDA

The main rate of WDA depends on the chargeable period. The main rate of WDA for chargeable periods beginning on or after:

  • 1 April 2026 for Corporation Tax or 6 April 2026 for Income Tax is 14% (FA 2026)
  • 1 or 6 April 2012 is 18% (FA 2012)
  • 1 or 6 April 2008 is 20% (FA 2008)

Prior to April 2008, the main rate of WDA was 25%.

Special rate WDA

The special rate of WDA also depends on the chargeable period. The special rate of WDA for chargeble periods beginning on or after:

  • 1 or 6 April 2019 is 6% (FA 2018)
  • 1 or 6 April 2012 is 8% (FA 2011)
  • 1 or 6 April 2008 is 10% (FA 2008)

The special rate of WDA was introduced from April 2008. Prior to April 2008, the rate of WDA was 6% for long-life assets (CA23700).

Hybrid rate of WDA

When a chargeable period begins before, and ends on or after, the date the main or special rate of WDA changes, a hybrid rate of WDA is used for that period (CA23222).

Ring-fence trades

For qualifying expenditure incurred wholly for the purposes of a North Sea ring fence trade in respect of which tax is chargeable under Section 330(1) CTA10 (supplementary charge in respect of ring fence trades) (see OT21000 for guidance on ring fence trades):

  • The main rate of WDA is 25%
  • The special rate of WDA is 10%

Small pools allowance

Where the balance of expenditure in the main pool or the special rate pool is £1,000 or less, the small pools allowance is available instead (CA23225).

Overseas leasing

The rate of WDA for the overseas leasing pool is 10% (subject to Revenue & Customs Brief 40/07) (CA24000). The overseas leasing rules don't apply for leases finalised on or after 1 April 2006.

Long or short chargeable periods

Reduce or increase the amount of WDA proportionately if the chargeable period is less or more than a year (there is an example at 'Capital allowances: accounting periods which are more or less than a year').

You should also reduce the amount proportionately if the qualifying activity has been carried on for only part of the chargeable period.

Reduced claims

The taxpayer may claim less than the full amount of a WDA.