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HMRC internal manual

Capital Allowances Manual

HM Revenue & Customs
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Plant and Machinery Allowances (PMA): cars: expenditure on a car falling partly under the old rules and partly under the new

FA2009/Schedule 11 para. 30

The commencement dates for the new emissions-based rules are explained in CA23540.

It is possible for some expenditure on a car to have been incurred at a time when the old rules applied and the balance of expenditure to be incurred at a time when the new rules apply. That is, it is possible to incur both old and new expenditure on the same car. Where this happens each block of expenditure is treated in accordance with the rules that apply at the time the expenditure is incurred, even if this means allocating expenditure on one car between two different pools.

Where expenditure incurred on the provision of a car includes both old and new expenditure and the car is disposed of , then the disposal proceeds are apportioned between the two pools on a just and reasonable basis. In practice, the disposal proceeds will be allocated to the twp pools in the same ratio or proportions as the acquisition costs.


Luxury Travel Ltd buys a car for one of its employees with a total cost of £90,000. A deposit of £15,000 was paid on 1 March 2009 and the balance of £75,000 paid when the car was delivered on 20 July 2009. The data on the car’s V5 shows that its emissions are 185g/km. The car is sold on 31 January 2012 for £50,000. The company’s accounting date is 31 December.

The £15,000 will fall within the old rules. This expenditure will be allocated to a single asset pool as the car is an expensive car. WDA may be claimed at 20% per annum (capped at £3,000 per annum) until the car is sold. The maximum claims are:

  • APE 31 December 2009 £3,000
  • APE 31 December 2010 £2,400
  • APE 31 December 2011 £1,060
  • (Total WDA £6,460)


The £75,000 will fall to be treated under the new rules. The car’s emissions exceed the 160g/km threshold, so the expenditure is allocated to the special rate pool and attract WDA at 10% per annum. This is the only expenditure in the special rate pool. The WDA that may be claimed are:

  • APE 31 December 2009 £7,500
  • APE 31 December 2010 £6,750
  • APE 31 December 2011 £6,075
  • (Total WDA £20,325)


When the car is sold in ape 31 December 2012 the disposal proceeds are apportioned in the same ratio as the acquisition costs. £8,333 (£50,000 x 15,000/90,000) is taken to the single asset pool and there is a balancing allowance of £207. The remaining £41,667 is taken to the special rate pool and reduces the available expenditure in that pool to £13,008 which continues to be written off at 10% per annum.

The rates of WDA of the main pool and the special rate pool are reduced to 18% and 8% respectively from 1 April 2012 (CT) and 6 April 2012 (IT).