Depreciation and other amounts written off assets

That's correct behaviour — depreciation isn't tax-deductible in the UK, so it gets added back in the tax computation. You claim tax relief on assets through capital allowances instead.

The way it works:

- Enter your depreciation figure in the P&L section — TinyTax automatically adds it back as a disallowable expense
- In the Tax Computation section, enter your Annual Investment Allowance (AIA) — this is the tax deduction for the actual cost of qualifying assets you bought this year

The AIA is usually the full purchase cost of qualifying assets (equipment, computers, machinery, etc.), not the depreciation amount. If your AIA claim equals your depreciation, they broadly cancel each other out and the net effect on taxable profit is close to zero.

More detail here: tinytax.co.uk/support/capital-allowances-aia

You're correct — the treatment of intangible assets is different from tangible fixed assets, and it's a commonly overlooked distinction.

For tangible assets (machinery, vehicles, computers), depreciation is disallowable for tax and is replaced by capital allowances (AIA or writing-down allowances). That's what the automatic add-back covers.

For qualifying intangible fixed assets — such as software, patents, trademarks, and customer lists acquired or created on or after 1 April 2002 — the rules are different. Under the Corporate Intangibles Regime (Part 8 CTA 2009), the amortisation charge in your accounts IS deductible for corporation tax. Capital allowances don't apply to these assets.

To handle this correctly in TinyTax:

1. Enter your total depreciation/amortisation in the P&L section as normal (covering both tangible and intangible assets as they appear in your accounts).

2. TinyTax automatically adds the full amount back in the tax computation. This is correct for tangible assets, but you'll need to offset the intangible portion.

3. In the Tax Computation section, enter the qualifying intangible amortisation as a negative number in the Other Tax Adjustments field. For example, if you amortised £3,000 on qualifying software, enter -3000. This restores the deduction the CIR entitles you to.

4. Don't claim capital allowances (AIA) on the same intangible assets — the negative Other Tax Adjustments entry is your tax relief.

One note on goodwill: since April 2019, tax relief on newly acquired goodwill has been restricted. If your intangibles include goodwill, the position is more complex and professional advice may be worth taking.