Writing Down Allowance Rates 2026/27: 14% Main Pool, 6% Special Rate

What Are Writing Down Allowances?

Writing down allowances (WDAs) are the annual capital allowances you claim on plant and machinery your business keeps using. Unlike the Annual Investment Allowance (AIA), which gives 100% relief in the year of purchase, WDAs spread the relief over years on a reducing balance basis.^[1]

Think of them as the tax version of depreciation, except the rates are set by statute, not by your accounting policy. For chargeable periods beginning on or after 1 April 2026 (companies) or 6 April 2026 (sole traders and partnerships), the main pool rate is 14% and the special rate pool is 6%. For 2025/26 and earlier periods the main rate was 18%. The cut comes from Finance Act 2026 section 28, which amends section 56 of the Capital Allowances Act 2001.^[2]

If you run a limited company, a sole trade, or a partnership, you claim WDAs on your corporation tax return (CT600) or self assessment return (SA103 for sole traders, SA800 for partnerships).

Writing Down Allowance Rates: Before and After April 2026

Both rates apply on a reducing balance: you multiply the pool value at the end of the period by the rate, claim that amount, and carry the rest forward. The main pool rate for the UK corporation tax and income tax regimes is the same; what differs is the commencement date (1 April 2026 for companies, 6 April 2026 for income tax).^[2]

The Writing Down Allowance Calculation

The calculation each period is: opening pool balance, plus qualifying expenditure not relieved by AIA or a first-year allowance, minus disposal proceeds (capped at original cost), multiplied by the pool rate.

Here is a worked example. A Manchester-based consultancy buys office furniture for £12,000 in June 2025 and chooses not to claim AIA on it. For the year ending 31 March 2026 (a period beginning before April 2026, so the 18% rate applies) the main pool WDA is £12,000 x 18% = £2,160. The pool carries forward at £9,840. For the year ending 31 March 2027, which begins on 1 April 2026, the rate is 14%: £9,840 x 14% = £1,377.60, carrying forward £8,462.40.

If the same consultancy installs a new air conditioning system costing £28,000 and its AIA is used up, that is an integral feature in the special rate pool: £28,000 x 6% = £1,680, carrying forward £26,320. See our integral features guide for what counts.

Straddling Periods: The Hybrid Rate

An accounting period that straddles the change does not switch rate mid-year. Instead FA 2026 s.28 prescribes a single time-apportioned hybrid rate between 18% and 14% for the whole period.^[2]

Worked example. A company draws accounts for the calendar year ending 31 December 2026. Of the 365 days, 90 fall before 1 April 2026 and 275 fall on or after it. The hybrid main rate is (90/365 x 18%) + (275/365 x 14%) = 4.44% + 10.55% = 14.99% (rounded). On a main pool of £20,000 the WDA for the year is £20,000 x 14.99% = £2,997 (against £3,600 at a full 18% year, or £2,800 at a full 14% year). Sole traders and partnerships apply the same mechanic around 6 April 2026. The special rate pool needs no apportionment because 6% did not change.

WDA vs AIA vs Full Expensing vs the 40% FYA

WDAs are the backstop. Before expenditure falls into a pool, check whether a first-year relief takes it out entirely or partly:

In practice: a company buying new plant for its own use claims full expensing (uncapped, 100%). An unincorporated business claims AIA up to £1m, and the new 40% FYA (introduced by FA 2026 s.29 on new and unused main-rate plant bought on or after 1 January 2026) matters mainly where the AIA cap is exhausted, since the remaining 60% then enters the main pool for 14% WDAs.^[3] Whatever no first-year relief covers gets WDAs. Our consolidated 2026/27 capital allowances guide covers the claiming order in depth, and our worked capital allowances example runs a single purchase through the whole system.

You do not have to claim maximum relief immediately. If you are loss-making or expect profits to move into the 25% corporation tax band, deferring relief by disclaiming AIA and taking WDAs instead can be worth more per pound, but at 14% the deferral is slower than it was at 18%, so model it rather than assume it.

Small Pools Allowance

If your main pool or special rate pool balance is £1,000 or less at the end of your accounting period, you can claim a small pools allowance and write off the entire balance in one go.^[4]

This is useful for old assets that have been writing down for years. Instead of claiming £140 a year on a £1,000 balance, claim the full £1,000. The allowance applies separately to each pool, so you can claim it on one pool and not the other. The £1,000 limit is time-apportioned for short or long periods.

Cars: Rates by CO2 Emissions

Cars are the one asset class where WDAs do most of the work, because cars are excluded from the AIA, full expensing and the 40% FYA:^[5]

• New zero-emission car (0g/km): 100% first-year allowance (s.45D CAA 2001).
• 50g/km or less (including second-hand electric): main pool, 14% WDA for 2026/27 (18% for periods beginning before April 2026).
• Over 50g/km: special rate pool, 6% WDA.

So a 120g/km company car writes down at 6%, while a 48g/km hybrid writes down at 14%. Sole traders and partners using a car privately restrict the claim to the business proportion (the car sits in a single asset pool). For the detail, including disposal quirks, see our dedicated guide to writing down allowances on cars.

Assets That Do Not Get WDAs

• Land and buildings (construction costs may qualify for the Structures and Buildings Allowance at 3% straight line instead; integral features and thermal insulation inside a building do qualify as plant)
• Assets you lease rather than own
• The private-use proportion of a mixed-use asset
• Items you would deduct as day-to-day running costs (repairs, consumables)

Capital allowances on commercial property, fixtures elections on a purchase and property-specific angles are their own topic; our capital allowances on property guide covers the overview. Sole traders can find the unincorporated-business treatment, including simplified expenses, in our sole trader capital allowances guide.

Disposals and Balancing Charges

When you sell or scrap an asset, deduct the disposal proceeds (capped at original cost) from the pool balance. If proceeds exceed the pool balance, the excess is a balancing charge added to your taxable profits in full; you do not spread it.

Example. A Bristol-based café sells a commercial oven for £3,500. The oven cost £8,000 and sat in the main pool, which stands at £12,000 before the sale. After deducting £3,500 the pool is £8,500. For a year beginning on or after 1 April 2026 the WDA is £8,500 x 14% = £1,190 (it would have been £8,500 x 18% = £1,530 for an earlier period).

If the pool had stood at £2,000, the £3,500 proceeds would push it £1,500 negative, and that £1,500 is a balancing charge. Selling an asset to a connected person (for example a company van to a director) must go through at market value; an undervalue sale understates the balancing charge and HMRC will adjust it.

Planning Points for 2026/27

• The rate cut raises the cost of pooling. At 14% reducing balance, barely half the cost is relieved after five years (and only 45 per cent after four). Anything that can go through AIA, full expensing or the 40% FYA should, unless you are deliberately deferring relief.
• Straddling periods need the hybrid rate. If your accounting period spans April 2026, apply the time-apportioned rate to the whole period rather than switching mid-year.
• Profit levels drive the disclaim decision. Relief at the 25% main rate or in the 26.5% marginal band is worth more per pound than at the 19% small profits rate; if profits are rising, spreading relief forward can pay, but at 14% the wait is longer.
• Associated companies share the AIA. A group or associated companies share one £1m AIA, which makes the WDA backstop (and full expensing, which is uncapped) more relevant. WDAs themselves are not restricted by association.
• Timing of expenditure matters. Expenditure is incurred when the obligation to pay becomes unconditional, normally delivery. Near a year end, which side a purchase lands on changes both the rate and the AIA year it consumes.

How to Claim Writing Down Allowances

Claim WDAs on your tax return: the CT600 for companies, SA103 or SA800 for sole traders and partnerships. Keep a capital allowances schedule listing every asset, its cost, purchase date, pool, and the WDA claimed each year. Most accounting software (Xero, FreeAgent, Sage) generates this from a properly configured fixed asset register; check the pool rates are set to 14% and 6% for periods from April 2026.

Keep the supporting records (purchase invoices, disposal proceeds, the pool computations) for at least 5 years after the 31 January filing deadline (sole traders and partnerships) or 6 years from the period end (companies).

Common Mistakes

1. Missing a first-year relief and defaulting to the pool. Forgetting to claim AIA (or full expensing) leaves you with 14% relief instead of 100%. Check the return before filing; AIA cannot be claimed late once the amendment window closes.

2. Misclassifying assets between pools. Integral features such as electrical systems and air conditioning belong in the special rate pool at 6%. Putting them in the main pool at 14% overclaims relief and HMRC will adjust it on enquiry.

3. Using 18% for a post-April-2026 period. The old main rate persists in templates and spreadsheets. Periods beginning on or after 1 April 2026 (CT) or 6 April 2026 (IT) use 14%, and straddling periods use the hybrid rate.

4. Forgetting the small pools allowance. Pool at £1,000 or less? Write the whole thing off rather than carrying tiny balances for years.

Final Thoughts

Writing down allowance rates are now 14% (main pool) and 6% (special rate pool) for periods beginning from April 2026, with 18% applying to earlier periods and a hybrid rate in between. The planning is in what you keep out of the pools: the AIA, full expensing and the 40% FYA all beat 14% reducing balance where they are available, and cars, where none of them apply, turn entirely on CO2 emissions.

Our calculators page includes a capital allowances estimator to model the options, and if you would like your capital allowances position reviewed before year end, get in touch.

Sources

1. Work out your capital allowances: rates and pools. GOV.UK. gov.uk/work-out-capital-allowances/rates-and-pools. Retrieved 2026-08-25.
2. Finance Act 2026, section 28 (writing-down allowances: reduction of main rate, amending Capital Allowances Act 2001 section 56). legislation.gov.uk. legislation.gov.uk/ukpga/2026/11/section/28. Retrieved 2026-08-25.
3. Finance Act 2026, section 29 (first-year allowance for main rate expenditure on plant or machinery, inserting Capital Allowances Act 2001 sections 45U and 45V). legislation.gov.uk. legislation.gov.uk/ukpga/2026/11/section/29. Retrieved 2026-08-25.
4. Claim capital allowances. GOV.UK. gov.uk/capital-allowances. Retrieved 2026-08-25.
5. Claim capital allowances: business cars. GOV.UK. gov.uk/capital-allowances/business-cars. Retrieved 2026-08-25.