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HMRC internal manual

Capital Allowances Manual

Plant and Machinery Allowances (PMA): cars: transitional rules for pre-April 2009 expenditure

FA09/Schedule 11 Para 31

Expenditure incurred before 1 April (where the person is within the charge to corporation tax) or 6 April (where the person is within the charge to income tax) 2009 on a car that cost less than £12,000 or that was a qualifying hire car (CA23515) will have been allocated to the main plant & machinery pool. This expenditure remains in the main pool after the introduction of the emissions-based rules (CA23535), and attracts WDAs at 20% per annum, until it is all relieved.

Pre-April 2009 expenditure that was required to be allocated to a single asset pool because it cost more than £12,000, as described in CA23520, will remain in the single asset pool until the end of the transitional period, unless it has been disposed of before then. WDAs will continue to be calculated at 20%, capped at £3,000 per annum. At the end of the transitional period, if the car has not been disposed of, any balance of unrelieved expenditure will be carried forward to the main pool and added to the unrelieved expenditure in that pool.

Pre- April 2009 expenditure on a car that was used partly for non-business purposes (CA23525) will have been allocated to a single asset pool regardless of the cost of the car. It will remain in that single asset pool until it is disposed of to enable the private use adjustment to be made. WDAs will be given at 20% per annum regardless of the carbon dioxide emissions of the car. There is no £3,000 cap on the WDA once the transitional period has ended.

The transitional period will end on the last day of a business’s first chargeable period to end on or after 31 March 2014 (for corporation tax) or 5 April 2014 (for income tax).


A company buys a car on 1 January 2008 costing £50,000. Its accounting period ends on 31 December each year. Its transitional period therefore ends on 31 December 2014. The car will be in a single asset pool (because it cost more than £12,000) until the end of the transitional period and WDA will be capped at £3,000 per annum for the 7 years to 31 December 2014. The unrelieved expenditure of £29,000 is then carried forward to the main pool. In the year ending 31 December 2015 WDAs may be claimed at the rate for the main pool with no cap, regardless of the car’s level of CO2 emissions. If the car is sold on 1 June 2016 the disposal proceeds will reduce the available qualifying expenditure in the main pool.