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HMRC internal manual

Capital Allowances Manual

Plant and Machinery Allowances (PMA): cars: expenditure incurred before 1 or 6 April 2009 - single asset pool, restriction on WDA and contributions

CAA01/S74 - S76

If expenditure was incurred on a car before 1 April 2009 (where the person claiming the allowances is within the charge to corporation tax) or 6 April 2009 (where the claimant is within the charge to income tax) and the cost of the car exceeded £12,000, the expenditure was allocated to a single asset pool, providing the car was not a qualifying hire car CA23515, or a qualifying car with low carbon dioxide emissions CA23153. The WDAs are calculated in the normal way and then restricted to an annual amount of £3,000.


Geronimo draws up his accounts to 31 December each year. He buys a Cadillac to use in the business for £36,000 on 4 July 2002 and claims WDAs. This is the capital allowance computation for the year ended 31 December 2002.

Cost of Cadillac £36,000
WDA restricted to £3,000 £3,000
Written down value carried forward £33,000

If Geronimo had drawn up his accounts for the 8 months to 31 August 2002 the WDA on the Cadillac would have been £2,000 (= £3,000 x 8/12).

If a person receives a contribution towards the expenditure on a car costing more than £12,000 the person making the contribution can claim WDAs on the contribution in the normal way. However, the annual WDAs for the person making the contribution and the recipient are restricted to a total of £3,000. Effectively the £3,000 is divided between them.


In the example above Geronimo receives a contribution of £12,000 from Sonny. Sonny’s annual WDAs are restricted to £1,000 (= £3,000 x £12,000 / £36,000) and Geronimo’s are restricted to £2,000 (= [£36,000 - £12,000] / £36,000).

Expenditure on a car on or after 1 or 6 April 2009 does not have to be put into a single asset pool (unless there is an element of non-business use of the car CA27005); the rules for expenditure after these dates are described in (CA23535). Pre April 2009 expenditure will remain in a single asset pool for a transitional period, after which any remaining unrelieved expenditure will be transferred to the main plant & machinery pool (CA23530).