Writing Down Allowance lets a business deduct a percentage of the value of plant, machinery or other capital assets from its profits each year, where the full cost cannot be claimed through the Annual Investment Allowance.
How the pools work
Assets are grouped into pools, typically written down at 18% or 6% a year on a reducing balance basis, meaning the deduction gets smaller each year as the pool's value falls. It is commonly used for assets bought above the AIA limit or for cars, which do not qualify for the AIA.
Tax rules depend on individual circumstances and can change. This glossary is general information rather than personalised tax advice.