Glossary

Writing-down allowance

A writing-down allowance gives 18% or 6% a year, on a reducing-balance basis, on plant and machinery spend not covered by the Annual Investment Allowance.

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18% or 6%Per year

Reducing balanceMethod

Definition

A writing-down allowance (WDA) is the annual capital allowance on plant and machinery not fully relieved by the Annual Investment Allowance — 18% a year on the main pool, 6% on the special-rate pool, on a reducing-balance basis.

In plain terms

When spend is not written off in full immediately, it sits in a pool and you claim a percentage of the remaining balance each year. So relief tapers over time rather than arriving all at once.

Why it matters for your company

Writing-down allowances matter for capital spend above the AIA or on special-rate assets. Because relief is spread, the timing of large purchases affects several years of tax, not just one — plan investment with that in mind.