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HMRC internal manual

Employment Income Manual

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:

2008/09 Cost 6,500
  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.