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HMRC internal manual

Employment Income Manual

Deductions from earnings: capital allowances: small pools allowance

S56A CAA 2001

This new type of Writing Down Allowance (WDA) for small pools was introduced by FA 2008 and applies to the main pool and the special rate pool. It does not apply to 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 20% = £240, leaving a balance of £960 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 £960 then. There is further guidance and examples at CA23225.