HRMC have launched a new online ‘Ready Reckoner’ tool which is designed to help calculate capital allowances.
The tool has been designed following the April 2008 redcution in Writing Down Allowances (WDA’s) from 25% to 20% for general plant and machinery and the chnage from 6% to 10% for long-life plant and machinery.
Where an accounting period straddles the changes a hybrid rate of WDAs must be used.
The hybrid rate is arrived at by calculating:
- the rate for the portion of the chargeable period falling before the change date
- the rate for the portion falling after that date
- adding the two rates together
The ‘Ready Reckoner’ will make this calculation for businesses. A link to the tool can be found on the HMRC website.