What is pool plant and machinery for capital allowances?
Answered 17 March 2026
Pool Plant and Machinery for Capital Allowances
What the law says
Under CAA 2001, capital allowances on plant and machinery are given on a pooled basis. The general rule (s.11 CAA 2001) is that expenditure qualifies for capital allowances if it is capital expenditure on the provision of plant and machinery, incurred for the purposes of a qualifying activity (which includes a trade), and the person owns the plant and machinery as a result of incurring it.
Pooling requirement (s.53 CAA 2001): Qualifying expenditure must be pooled for the purpose of determining a person's entitlement to writing-down allowances (WDAs) and balancing allowances, and liability to balancing charges. Where a person carries on more than one qualifying activity, expenditure relating to different activities must not be allocated to the same pool.
Types of pool (s.54 CAA 2001): There are four types of plant and machinery (PMA) pool:
- The main pool – the default pool for most plant and machinery expenditure
- The special rate pool – for special rate expenditure (e.g. integral features of buildings, long-life assets)
- The overseas leasing pool – for assets leased overseas to which the overseas leasing legislation applies
- Single asset pools – required where expenditure is incurred partly for the purposes of a qualifying activity and partly for other purposes (s.206 CAA 2001)
How the pool works: A taxpayer incurring expenditure on plant and machinery increases the pool. WDAs are made as a percentage of the balance in the pool on a reducing balance basis. When plant and machinery is sold, the proceeds are brought in as a "disposal value", which reduces the pool balance. If the disposal value exceeds the pool balance, a balancing charge arises.
HMRC guidance / practice
The main pool attracts WDAs at 18% per annum (reduced from 20% by FA 2011, and originally 25% before FA 2008). Typical main pool assets include cars used wholly for business purposes and general plant and equipment not falling into the special rate pool.
The special rate pool attracts WDAs at 6% per annum (reduced from 10% by FA 2011). It covers long-life assets and integral features of buildings.
Small pools allowance: Where the balance of a pool is £1,000 or less, it may be written off immediately.
Annual Investment Allowance (AIA): Businesses can claim a 100% first-year allowance on qualifying plant and machinery expenditure (excluding cars) up to the annual threshold, regardless of which pool the asset would otherwise fall into.
Example of main pool in practice: A business that buys cars used only for business purposes and other equipment (where AIA is not claimed) adds the expenditure to the main pool balance and claims WDAs each period.
Citation sources
Where a person carries on more than one qualifying activity there is a pool (or pools) for each qualifying activity. These are the different types of PMA pools: The main pool The special rate pool The overseas leasing pool, which contains all the expenditure on assets leased overseas to which the overseas leasing legislation CA24000 applies. Single asset pools
The following example was when the written down allowance for main rate pool was 25% and the special rate pool was 10%. The current rates are 18% and 6% respectively. Partex Ltd is a leasing company claiming capital allowances at 25% on its machinery and plant pool for the accounting period (AP) year ended 31 December 2005. The pool includes several ships, which are either non-qualifying or leased to non-tonnage tax companies. One of the leased ships in that pool (which originally cost £50m) bec
ed for the purposes of a “qualifying activity”, which includes a trade. Allowances are generally given on a “pooled” basis, so a taxpayer incurring expenditure to acquire plant and machinery increases the pool of expenditure qualifying for allowances. Allowances are made as a percentage of the balance available in the pool, the pool being reduced by the amount of the allowances given (known as the reducing balance basis). A taxpayer selling plant and machinery that has qualified for allowances i
ses of this Part”. 56. Carrying on a ring fence trade is defined (as far as relevant) as meaning activities which fall within the definition of “oil -related activities” in s274 CTA 2010 and which constitute a separate trade (whether as a result of s279 CTA 2010) or otherwise. 57. Therefore an IRF trade and an ORF trade are separate qualifying activities. 58. Both s11 CAA 2001 and s162 CAA 2001 are in the same Part of the Act, i.e. Part 2. 59. Section 53 CAA 2001 sets out rules regarding the poo
Part 3 Capital allowances Plant and machinery: writing-down allowances and pools Special rate expenditure and the special rate pool 82 Schedule 26 contains provision about special rate expenditure and the special rate pool.
The business bought two main rate cars some years ago. They were used only for business purposes so the expenditure was pooled in the main pool and writing down allowances were claimed. The business bought other equipment in a later year and did not claim Annual Investment Allowance (AIA) in that year so the expenditure was added to the balance of expenditure in the main pool and writing down allowances were claimed. At the end of the last period before the business starts to use cash basis the
An overseas lessee is a lessee that: is not resident in the UK, and does not use the plant or machinery exclusively for earning profits chargeable to tax. Plant or machinery is used for overseas leasing if the lessee is an overseas lessee. For the purposes of the overseas leasing legislation profits chargeable to tax are profits that are chargeable to UK tax. Treat profits made from the exploration or exploitation of the seabed that are chargeable to UK tax under ICTA88/S830 (4) as profits charg
The capital allowances changes introduced in FA2008 represented the biggest reform of the capital allowances system since the 1980s. The changes were part of a wider ‘Business Tax Reform’ package, which included a 2% cut in the main rate of corporation tax. The reforms had three main objectives: (1) to promote investment and growth; (2) to reduce distortions and complexity and (3) to maintain fairness and refocus the tax system for smaller businesses. The main capital allowances changes were: Th