EIM36930 - Deductions from earnings: capital allowances: balancing allowances and charges
Balancing adjustments may be required when an employee ceases employment or sells or otherwise disposes of an asset for which plant or machinery allowances have been claimed.
Example
A salesman working from home ceases employment on 30 November 2025. He had previously claimed Annual Investment Allowance on the full cost of a laptop which was necessarily provided for his employment. The laptop originally cost £3000. Upon cessation of employment, he decides to keep the laptop for his own personal use. At this point, its market value is £1500. The salesman is required to bring into account a disposal value of £1500, which gives rise to a balancing charge of £1500.
If in the above example, the salesman had made an apportionment for 20% private use when claiming the AIA and had accordingly only claimed £2400 (£3000 x 80% = £2400), the balancing charge would be adjusted on a similar basis, so that the cessation of employment would give rise to a balancing charge of £1200 (£1500 x 80% = £1200).