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WRITING DOWN ALLOWANCES

WHAT ARE WRITING DOWN ALLOWANCES?

Writing Down Allowances (WDAs) are a form of tax relief for businesses. They allow companies to deduct a percentage of the cost of their assets from their profits each year, spreading out the deduction over several years.

Through Capital Allowance Specialists, businesses can often combine WDAs with other forms of tax relief such as the Annual Investment Allowance (AIA) or Super-Deduction. By leveraging these synergies, commercial property owners can craft an optimal tax strategy beyond the scope and scale of typical accountancy firms.

WHY WDAs?

NAVIGATING YOUR TAX RELIEF THROUGH WDAs

In the realm of UK taxation, capital expenditures don’t directly result in immediate total tax deductions. This is where Writing Down Allowances (WDAs) come into play, providing businesses the leeway to offset the cost of assets over time.

Unlike immediate reliefs where you can claim the whole cost in one year, WDAs let businesses gradually write off investments, ensuring they reap tax benefits for a prolonged period. This methodology not only assists in managing financial flows but also in matching asset depreciation with tax reliefs.

The types of WDAs include:

  1. Main Rate Pools: This includes most plant and machinery and typically, businesses can claim 18% of the remaining balance each year.
  2. Special Rate Pools: Certain assets, including those with longer economic lives or integral features in buildings, come under this, attracting a 6% annual allowance.

It’s essential to understand the correct pool for your assets and the appropriate rate to apply. Misjudgments can lead to missed savings or even compliance issues.

Imagine you’ve invested Β£10,000 in machinery. With the main rate pool WDA of 18%, you can claim a deduction of Β£1,800 in the first year. The remaining balance (Β£8,200) gets carried forward to the next year, and you claim 18% on this new balance, and so forth.

While WDAs are versatile, there are certain assets and scenarios where they don’t apply, such as:

  • Land and buildings
  • Assets used only for leasing

Writing Down Allowances, though beneficial, come with their intricacies. At HMA Tax, our experts are adept at navigating the nuances of WDAs, ensuring you are receiving the maximum claim that you’re entitled to.

With an intricate understanding of the UK tax landscape, HMA Tax stands at the forefront of helping businesses maximize their tax benefits. Our deep expertise in Writing Down Allowances ensures you never miss out on rightful claims.

PARTNER WITH EXCELLENCE

THE UK'S LEADING CAPITAL ALLOWANCE SPECIALISTS

With over 7,000 claims completed, HMA Tax is trusted by thousands of commercial property owners, Accountants & Solicitors across the UK.

Our service is guaranteed to be fully HMRC compliant, meaning our clients have peace of mind when claiming their Capital Allowances with the UK’s leading independent specialists.

We regularly handle Embedded Capital Allowance claims for commercial property owners and property professionals, ensuring that they are processed quickly, efficiently and effortlessly.

Has my accountant already done this?

Probably not. It’s a highly specialised area of tax statute and requires very specific knowledge of this area as well as a specialist team that includes a chartered surveyor and a chartered tax specialist.

Will this effect Capital Gains Tax (CGT) on my property?

No, Capital Allowance claims do not effect the value of your property and have no impact on your Capital Gains position.

In fact, when buying or selling commercial property, a Capital Allowance claim from HMA Tax can have a positive impact on your overall position.

Will this cause a problem with HMRC?

Capital Allowances are part of standard business routines and are therefore claimed each year against cost clients incur to operate.Β  HMRC does not take issue with Capital Allowance claims on the basis we adhere to guidelines and the legislation applicable to each claim.

Fortunately, at HMA Tax we have a flawless, 100% success rate with claims we have made to HMRC and have never had an issue completing a claim with HMRC.

Are there any hidden costs?

Absolutely not. We look at claims for you on a results only basis, which means that if we do not find allowances that have been approved by HMRC, then we charge you nothing and any initial costs are covered by us. Our fee is completely linked to a successful outcome, so there is nothing to lose by investigating a potential claim.

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