CA23225 - PMA: WDA & balancing adjustments: WDAs for small pools
Section 56A CAA01
The small pools allowance 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 is less than or equal to the ‘small pool limit’ of £1,000, the person is entitled to a WDA of that amount. A person may either claim the small pools allowance (if the amount in the pool does not exceed the limit) or the normal rate of WDA. They cannot claim both in respect of the same pool in the same chargeable period.
For example, if there was £1,100 in the main pool, then the person would be unable to claim the small pools allowance that year. Instead, they could claim a normal WDA of 14% which equals £154, leaving a balance of £946 to be carried forward to the next chargeable period. If, for example, they incurred no new expenditure and made no disposals in the next chargeable period, they would be able to claim a small pools allowance of £946 then.
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 claim
The taxpayer may claim less than the full amount of the small pools allowance.