EIM36670 - Deductions from earnings: capital allowances: calculation of the allowances due: balancing allowances and charges: when they arise

Section 65 CAA 2001

A balancing charge will normally have to be made where an employee has been given capital allowances on an item of plant or machinery used in the performance of his or her duties and they subsequently:

  • sell or otherwise dispose of the plant or machinery
  • cease to use it in the employment because the employment ends
  • permanently cease to use it in the performance of the duties of the employment

A balancing allowance can only arise in the unlikely event that the employee has claimed WDAs rather than the AIA. In most cases we would expect employees to claim AIA.  

For further information about balancing adjustments, see CA23210.