What is Writing-Down Allowance? UK Definition 2026/27
Quick Answer
Annual capital allowance claiming a percentage of an asset pool each year.
Definition of Writing-Down Allowance
Writing-Down Allowance (WDA) is the annual capital allowance claimed on assets in the main pool (18%) or special rate pool (6%). Unlike Annual Investment Allowance or First Year Allowances that give 100% relief, WDA spreads relief over several years. The allowance is calculated on the reducing balance each year.
Writing-Down Allowance — Key Facts for 2026/27
| Main pool rate | 18% per year |
| Special rate pool | 6% per year |
| Calculation | Reducing balance |
| No annual limit | Applies to all pool |
How Writing-Down Allowance Works — Example
- 1Equipment cost: £10,000 (main pool)
- 2Year 1 WDA (18%): £1,800, balance £8,200
- 3Year 2 WDA (18%): £1,476, balance £6,724
- 4Year 3 WDA (18%): £1,210, balance £5,514
- 5Relief continues until pool reaches £1,000
How Writing-Down Allowance Affects Your Tax
WDA gives slower tax relief than AIA or FYAs but has no annual limit. When AIA is exhausted or for special rate assets, WDA provides ongoing relief. The small pools allowance lets you write off pools under £1,000.
Official HMRC Guidance on Writing-Down Allowance
For official guidance, refer to HMRC's documentation. Tax rules can change, so always verify current rates and thresholds on gov.uk.
HMRC: Capital allowancesFrequently Asked Questions about Writing-Down Allowance
Related Tax Terms
Annual Investment Allowance (AIA)
Tax relief allowing businesses to deduct 100% of qualifying equipment costs up to £1 million.
Capital Allowances
Tax relief on qualifying business assets like equipment, vehicles, and machinery.
First Year Allowance
100% tax relief in the year of purchase for qualifying business assets.
Accuracy Note
This information is for guidance only and is based on 2026/27 tax year rates. Tax rules are complex and your circumstances may differ. For personal advice, consult a qualified accountant or tax adviser.