PMA: WDA & balancing adjustments: WDAs for small pools
The small pools alowance applies to the main pool and the special rate pool. It does not apply to other pools such as single asset pools.
Where the total amount of a person’s qualifying expenditure (in the pool, or to be added to the pool), minus the total of any disposal receipts for the chargeable period - call this amount £x - is less than or equal to the ‘small pool limit’ of £1,000, the person is entitled to a WDA of that amount (that is, of £x). A person may either claim the small pools WDA (if the amount in the pool does not exceed the limit) or the normal percentage WDA. He cannot claim both WDAs in respect of the same pool in the same chargeable period.
If, in one year, £x were, for example, £1,200, then the person would be unable to claim the ‘small pools’ allowance that year. Instead, he could claim (say) a normal WDA of 18% = £216 , leaving a balance of £984 to be carried forward to the next chargeable period. And, if for example, he incurred no new expenditure and made no disposals in the next chargeable period, he would be able to claim a small pools allowance of £984 then.
The taxpayer may claim less than the full amount of the small pools WDA.