Work out what you can claim
You can claim the full cost of the item if you’re claiming:
You claim based on the rate for items that don’t qualify for AIA or first year allowances.
Work out your allowance
Work out what you can claim separately for each pool.
Take your closing balance from your last accounting period.
Add the value of anything you’ve bought or been given in the current period that qualifies for this pool. Only include VAT if you’re not VAT registered.
Deduct the value of anything you sold or ‘disposed of’ that originally qualified for this pool.
Work out how much you can claim using the correct rate.
Deduct the amount you can claim from the pool to get the closing balance. This is known as the ‘tax written down value’.
Example The opening balance in your main pool is £9,000. You buy a machine worth £1,200. The total for this pool is then £10,200 (£9,000 plus £1,200).
You sell a desk for £200. The total for this pool is then £10,000 (£10,200 minus £200).
Apply the rate for the main pool (18%). The amount you can claim for this pool in this period is £1,800 (18% of £10,000).
The rest (£8,200) is your closing balance or tax written down value. This is carried over and becomes your opening balance in this pool for your next accounting period.
Items you use outside your business
For items that are in a single asset pool because you’ve used them outside your business, reduce the amount you can claim by the amount you use them privately.
You still deduct the full amount from your pool to get the closing balance.
Example You have a single asset pool for a car that qualifies for the main rate (18%). The opening balance is £10,000. You use the car for your family for half the time.
If you didn’t use it outside your business, you could’ve claimed £1,800 (18% of £10,000) for the car. Because you use it for your family half the time, you can only claim £900 (half of £1,800).
You still deduct the full amount of capital allowances (£1,800) from your balance - even though you can only claim half of them (£900) on your tax return.
The closing balance in this pool is £8,200 (£10,000 minus £1,800). This is the starting balance for the next year.
Items you use privately that aren’t in a single asset pool
If you start using something outside your business that you’ve already claimed capital allowances on:
- add the market value of the item (the amount you’d expect to sell it for) to a single asset pool
- deduct the same amount from the pool it was in
If the amount you deduct is more than the balance in the pool, the difference is a ‘balancing charge’ - you must put it on your tax return.
Claiming less than you’re entitled to
You don’t have to claim the full amount you’re entitled to. If you only claim part, the rest stays in your closing balance.
If you have £1,000 or less in your pool
You can claim the full amount if the balance in your main or special rate pool is £1,000 or less before you work out your allowance.
This is called a small pools allowance. It doesn’t apply to single asset pools. You can either claim a small pools allowance or writing down allowances - you can’t claim both.
This amount is adjusted if your accounting period is more or less than 12 months.
Example If your accounting period is 9 months the limit will be 9/12 x £1,000 = £750.
How to claim
Claim on your tax return.