EIM36680 | Deductions from earnings: capital allowances: balancing charges: how they are calculated

Section 57 CAA 2001

The balancing adjustment is made by reference to the 'disposal value' of the item concerned.

If the plant or machinery has been sold this will be the sale proceeds unless the sale was not at market value. Refer the case to the Capital Allowances Single Point of Contact for your area if:

· you suspect the sale was not at market value or

· the plant or machinery was acquired from a connected person or

· the adjustment is needed because the employment has ended or the plant or machinery has permanently ceased to be used in the performance of the duties.

The Capital Allowances Single Point of Contact for your area will determine the disposal value in accordance with CA23250.

Both balancing charges and allowances have to be adjusted to take private use into account in accordance with EIM36570 - see example EIM36930.

Where the extent of private use has varied over the life of the item an average fraction has to be used.