Special Rate Pool

When you purchase business assets you can often deduct the full value of these from your profits using the Annual Investment Allowance (AIA).

You can claim a Writing Down Allowance (WDA) instead if:

  • You’ve used up all of your AIA for the period
  • The item doesn’t qualify for the AIA (for example cars)

WDAs allow you to deduct a percentage of the cost of the item from your profits each year.

There are various different rates of WDA depending on the type of item being claimed for.

One of the rates is 8% & this applies to the following items of expenditure:

  • Long life assets
  • Thermal Insulation of Buildings
  • Cars with CO2 Emissions of more than 130G/km
  • Items within a building that are classed as Integral Features, which are as follows:
    • Lifts, escalators & moving walkways
    • Space & water heating systems
    • Air-conditioning & air-cooling systems
    • Hot & cold water systems
    • Electrical systems & lighting systems
    • External solar shading

In the Budget on 29 October 2018 The Chancellor announced that the rate of WDA for this type of expenditure will be reduced to 6% with effect from April 2019.  The increase in the AIA discussed in our previous Capital Allowances article should offset the impact of this change for most businesses purchasing new items.