Business2026/27

What is Writing-Down Allowance? UK Definition 2026/27

Verified by ICAEW, ACCA & AAT
Updated April 2026

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 rate18% per year
Special rate pool6% per year
CalculationReducing balance
No annual limitApplies to all pool

How Writing-Down Allowance Works — Example

WDA over three years
  1. 1Equipment cost: £10,000 (main pool)
  2. 2Year 1 WDA (18%): £1,800, balance £8,200
  3. 3Year 2 WDA (18%): £1,476, balance £6,724
  4. 4Year 3 WDA (18%): £1,210, balance £5,514
  5. 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 allowances

Frequently Asked Questions about Writing-Down Allowance

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.