Deductions from earnings: capital allowances: example: writing down allowance: restriction of allowance in year employment begins
A maintenance engineer takes up employment in Birmingham on 6 October 2008. On 6 January 2010, after three months training, the engineer buys equipment for use in the performance of the duties of the employment. The equipment cost £6,500 and is used wholly for business purposes.
He elects not to claim Annual Investment Allowance. Writing down allowances may be claimed as follows:
|Writing down allowance (restricted, see EIM36650)|
|6/12 x 20% of £6500 =||650|
|Residual value carried forward||5,850|
|200//10||Writing down allowance|
|20% of £5,850 =||1,170|
|Residual value carried forward||4,680|
Note that the writing down allowance is restricted by reference to the date when the employment began, not the date when the car was bought.