SE36650 - Deductions from emoluments: capital allowances - calculating the allowances due - writing down allowances - general
Section 58 CAA 2001 (previously, Section 24 CAA 1990)
Machinery or plant necessarily provided for use in the performance of the duties (see SE36540) qualifies for a writing down allowance of 25 per cent provided that
- it belongs to or has belonged to the employee and
- the expenditure was notified to the Revenue within the time limit set out in SE36860.
But if the expenditure qualifies for a first year allowance (see
SE36610), first year allowance and
writing down allowance cannot be claimed on the same expenditure
for the same year. See also
SE36750 regarding the £3000 limit on
writing down allowances for motor cars for 2001/02 and earlier.
Remember that employees cannot claim capital allowances for cars
after 5 April 2002 (see SE36520).
In the simplest case where a qualifying item of plant is
bought during the year for £1,000 in a continuing employment,
the writing down allowance will be £250 (25% x £1000).
The difference of £750 is called the 'residual value' and this
is the figure on which a writing down allowance of 25 per cent will
be calculated for the following year if circumstances remain the
same.
For further guidance regarding the amount on which the
writing down allowance is calculated, see
SE36660.
The rate of 25 per cent is not reduced where plant is
acquired part way through a year of assessment.
But if the employment itself only starts part way through the
year, the amount of the writing down allowance is restricted to the
proportion of the year the employment is held (see example
SE36915).
An employee may decide not to claim a writing down allowance,
or may claim all or part of the allowance due.
See
SE36670 for the adjustments needed
where
- the office or employment ceases or
- the plant or machinery is disposed of or ceases to be used in the performance of the employee’s duties.
