Glossary · UK
What is Writing Down Allowance (WDA)?
A capital allowance that lets a business deduct a percentage of the value of plant and machinery from profits each year.
Full Definition
A writing down allowance is the capital allowance a business claims on plant and machinery that does not qualify for, or has not been covered by, a full first-year deduction such as the Annual Investment Allowance. Instead of deducting the whole cost at once, the business writes off a percentage of the value of its assets each year on a reducing balance basis. For 2026/27 the main rate pool attracts a writing down allowance of 18% a year, while the special rate pool, which covers items such as integral features of buildings, long-life assets and most cars with higher emissions, attracts 6% a year. Each year the allowance is calculated on the pool's balance after the previous year's deduction, so relief tapers gradually over time. Small pools of 1,000 pounds or less can be written off in full. Writing down allowances are typically used once spending exceeds the Annual Investment Allowance of 1 million pounds, or for expenditure that does not qualify for the more generous first-year or full expensing reliefs.