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I was going through a question- Greenzone Ltd.
There the period-end was 6-month period to 31 March 2026.
And the company had installed new air-conditioning system for £550,000.The question asks for maximum capital Allowances that can be claimed.
So the answer was 525,500
I was able to get it right but I was confused about WDA @ 6%
The answer explained that WDA will not be available on the remainder of the new expenditure until the following period.
Is it because we claimed AIA and FYA 50%?
And is this only for corporation tax?
Thank you.
Yes and yes!
The AIA is time apportioned for the six month period to £500,000. The £50,000 that is not covered by the AIA is entitled to the 50% FYA (Special Rate Pool) which is not time apportioned, giving a total this period of £525,000 (not £525,500) . The 6% WDA cannot be claimed in the same period that the 50% FYA is claimed, but will be available in the following period on the TWDV carried forward (£25,000).
Only companies are entitled to the 50% FYA in the SRP (and the ‘full expensing’ treatment in the main pool).
Is it the same with full expensing in the first year? Meaning that we can’t claim 18% in the main pool but the following year we can?
With full expensing there’d be nothing left to claim on, either this period or next, as after any AIA is applied, the balance gets a 100% FYA.
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