Writing-Down Allowance

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Writing-Down Allowance

A reduction in the taxable income of a corporation due to assets acquired in a year. To calculate the writing-down allowance, one adds a percentage of the value of the assets purchased in the current year to the depreciation on assets purchased in previous years. The writing-down allowance reduces a company's corporate tax liability.
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But what wasn't clear was how these new Writing Down Allowances would be applied.
If the AIA is abolished and replaced by a reduction in the tax rate to say 20% with a 20% writing down allowance given on qualifying capital expenditure, the tax relief on pounds 50,000 of expenditure would then only be worth pounds 2,000, resulting in a potential loss of tax of pounds 8,500.
For companies buying these low-emission cars, there's the tax benefit of a 100% first year writing down allowance.
UK companies that purchase a Roadster benefit from a 100 percent Writing Down Allowance, meaning they can deduct the price of the car from their taxable profits.
He has reduced the Writing Down Allowance for everyone from 25 to 20 per cent.
Capital allowances - also known as writing down allowances - will decrease from 20% to 18%, while the special capital allowance rate will be cut from 10% to 8%.