CT600 Box 700: Capital Allowances Pool Explained
When your company buys equipment, machinery, or vehicles for business use, the assets typically enter a capital allowances pool — a running account that tracks the value of qualifying assets over time. Box 700 on the company tax return is where information about the capital allowances pool is reported.
This guide explains how capital allowances pools work, why they exist, which types of pool apply to different assets, and how pooling fits into your overall corporation tax calculation.
What Is a Capital Allowances Pool?
A capital allowances pool is an accounting mechanism used by HMRC to calculate how much tax relief your company can claim on qualifying plant and machinery over time.
Rather than deducting the full cost of an asset in the year of purchase (which is what the Annual Investment Allowance does), the pool approach spreads the deduction. Each year, you claim a percentage of the remaining pool value as a writing down allowance (WDA). The balance carries forward, and the process repeats until the pool is exhausted or assets are disposed of.
The pool is cumulative — you do not track individual assets within it. Instead, you maintain a single running total that increases when you buy qualifying assets and decreases when you sell them or claim allowances.
Types of Capital Allowances Pool
There are three main pool types that appear in capital allowances computations:
| Pool Type | WDA Rate | Typical Assets |
|---|---|---|
| Main pool | 18% per year | Most plant and machinery, vans, IT equipment |
| Special rate pool | 6% per year | Integral building features, long-life assets, solar panels, high-emission cars |
| Single asset pools | 18% or 6% | Short-life assets (by election); cars with private use |
Special rate pool: Assets in this pool attract the lower 6% WDA rate. They include integral features of a building (lifts, air conditioning, heating systems), long-life assets (expected useful life exceeding 25 years and cost over £100,000), solar panels, and cars with CO₂ emissions above 50g/km.
Single asset pools: These are separate pools for individual assets, typically used for short-life assets (where you expect to sell or scrap the asset within 8 years) and cars that have some private use. A separate pool means you get a balancing allowance when the asset is disposed of.
How Pool Accounting Works
Each accounting period, the pool follows a standard calculation:
- Opening pool value — the balance carried forward from the previous year
- Add qualifying additions — cost of new assets purchased during the period
- Less AIA claimed — if you claim Annual Investment Allowance on any additions, reduce the pool by that amount (AIA removes assets from the pool because the full cost has already been deducted)
- Less disposal proceeds — when you sell or scrap a pooled asset, deduct the proceeds from the pool
- Apply WDA rate — multiply the net pool value by the WDA percentage (18% for the main pool)
- Closing pool value — the balance carried forward to the next accounting period
Worked Example
Your company has a main pool opening balance of £50,000. During the year, you buy new equipment costing £20,000. You claim AIA of £20,000 on the new equipment. No disposals.
| Step | Amount |
|---|---|
| Opening pool value | £50,000 |
| + Additions | £20,000 |
| − AIA claimed (Box 690) | (£20,000) |
| = Net pool before WDA | £50,000 |
| × WDA at 18% | £9,000 |
| Closing pool value c/f | £41,000 |
AIA vs Pool Allowances
The Annual Investment Allowance (Box 690) gives 100% first-year relief — you deduct the full cost of qualifying assets immediately. However, when you claim AIA, those assets are removed from the pool because the cost has already been fully deducted.
The pool WDA applies to:
- Assets where no AIA was claimed (for example, cars, which cannot use AIA)
- The remaining pool balance from assets bought in previous years
- Additions that exceed the £1,000,000 AIA limit
For details on claiming AIA, see our guide to CT600 Box 690: Annual Investment Allowance.
The Capital Allowances Pool and Corporation Tax
Capital allowances — whether AIA or WDA from the pool — are deducted from your tax-adjusted profits before corporation tax is calculated. This means a larger capital allowances claim directly reduces the profits on which corporation tax is charged.
For a company with £100,000 of taxable profits paying the main rate of corporation tax at 25%, a £10,000 WDA claim would save £2,500 in tax. For companies paying the small profits rate of 19%, the saving on the same £10,000 claim is £1,900.
The WDA deduction is claimed in the Allowances and Charges section of the CT600 form. Box 700 captures the pool activity — the opening balance, additions, and disposals — while Box 735 records the writing down allowance itself.
Budget 2025: Upcoming WDA Rate Change
At the Autumn Budget 2025, the government announced a reduction in writing down allowance rates that will take effect in April 2026:
- Main pool: reducing from 18% to 14% from 1 April 2026 (corporation tax)
- Special rate pool: also reducing from 1 April 2026
Source: GOV.UK Capital Allowances
Short Accounting Periods
If your accounting period is shorter than 12 months — which is common for newly incorporated companies — the WDA rate is applied pro-rata:
Effective WDA rate = 18% × (months in period ÷ 12)
For a 9-month first accounting period: 18% × 9/12 = 13.5%
Similarly, the AIA limit is reduced proportionally for short periods, which means less of the pool additions may be removed via AIA before the WDA calculation applies.
Small Pools Allowance
If the total value of the main pool (or special rate pool) falls to £1,000 or less at the end of a period, you can claim the entire remaining balance as a small pools allowance instead of calculating WDA. This avoids the administrative overhead of continuing to track a pool with a very small balance.
The small pools allowance is applied separately to the main pool and special rate pool — you cannot combine the two pools to reach the £1,000 threshold.
Balancing Allowances and Charges
In some circumstances, the pool calculation produces a special result:
Balancing allowance: If you cease trading and there is still a balance in the pool, you can claim the full remaining value as a one-off deduction in the final period. This brings the pool to zero.
Balancing charge: If disposal proceeds from selling pooled assets exceed the pool balance, the surplus becomes a balancing charge — it is added back to your taxable profits. This typically arises when assets have been written down significantly over many years and are then sold for more than their pool value.
What TinyTax Handles Automatically
When you use TinyTax to file your company tax return, you enter your total capital allowances in the tax return form and the software handles the CT600 box population, including the AllowancesAndCharges section. For most small companies claiming within the AIA limit, the figures flow directly from the annual accounts and computations prepared by your accountant.
For detailed pool calculations across multiple years, your accountant or accounting software maintains the pool ledger. The resulting capital allowances total then feeds into the CT600 to reduce your corporation tax liability.
Summary
The capital allowances pool is how HMRC tracks the ongoing tax value of your company's plant and machinery over time. Assets enter the pool when purchased, leave it (or reduce it) when you claim AIA or dispose of them, and the declining balance attracts a percentage WDA each year. Box 700 on the CT600 captures the pool position, while the actual writing down allowance claimed from the main pool is recorded in Box 735. With the WDA rate reducing from 18% to 14% from April 2026, reviewing your capital expenditure timing now could help you maximise relief before the change takes effect.
For full details on the writing down allowance from the main pool, see our guide to CT600 Box 735: Main Pool Allowances.