Capital allowances

Based on CO2 emissions

The table below shows the WDA allowance as a percentage based on the official CO2 g/km figure for the vehicle in the pool

2023/24 2024/25 2025/26 2026/27 2027/28
100% First year allowance2023/240 or below2024/250 or below2025/260 or below2026/270 or below2027/280 or below
18% WDA - Main pool2023/241 to 502024/251 to 502025/261 to 502026/271 to 502027/281 to 0
6% WDA - Special pool2023/24Above 502024/25Above 502025/26Above 502026/27Above 502027/28
8% WDA - Special pool2023/242024/252025/262026/272027/28Above 0

For corporation tax purposes the thresholds above apply to cars purchased on or after 1st April whereas for income tax purposes new tax years start on 6th April.

Finance Bill 2018-19 reduces the special pool rate from 8% to 6%

Electric charge-points are eligible for 100% FYAs until April 2023 (Finance Bill 2018-19)

Capital allowances for vans

A van with zero CO2 emissions is eligible for a 100% first year allowance if purchased before April 2021.

Any other van should be treated as plant and machinery and allocated to the main pool, where it will be eligible for writing down allowances at 18%.

Annual Investment Allowance

The Annual Investment Allowance of £200,000 will increase to £1,000,000 for expenditure in the period 1st January 2019 to 31st December 2020 (Finance Bill 2018-19). This measure has been extended for twelve months to 31st December 2021.

Where qualifying expenditure exceeds the annual cap, tax relief will be given under the normal capital allowance regime via the main or special rate pools, with writing down allowances being given at the appropriate rates.