The short version: Tax written down value is what an asset is worth for tax purposes after you’ve claimed capital allowances on it. It’s the starting point for calculating next year’s writing down allowance.
When does it matter?
When you’re claiming capital allowances on assets that don’t qualify for the Annual Investment Allowance. Cars are the main example. Instead of deducting the full cost in year one, you claim a percentage each year based on the written down value.
How does it work?
You start with what you paid. Claim a percentage as your allowance. The remaining value is your new written down value. Next year, claim the percentage on that lower figure. And so on until the value is negligible.
Why is it complicated?
Different assets go in different pools with different rates. Some assets have special rules. It’s one of those areas where getting it wrong can cost you money or attract HMRC attention.
Got assets you’re claiming allowances on? We can make sure your calculations are right.
