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ACCA Applied Skills · Taxation (UK) · Income from self-employment

Priya is a sole trader with a 12-month accounting period ended 31 March 2026. The main pool had a tax written down value brought forward of £20,000. In the year she bought plant and machinery for £30,000 (all main pool items and none are cars) and sold an item from the pool for £5,000 (original cost £8,000). The annual investment allowance is claimed in full on the additions. What is the total capital allowances claim for the year?

The claim is £32,700: AIA of £30,000 on the additions plus a WDA of £2,700, being 18% of the pool of £15,000 after deducting the £5,000 disposal proceeds.

  1. A£34,500Correct
  2. B£30,000
  3. C£33,300
  4. D£34,200

Explanation

AIA of £30,000 is given on the additions (100%, within the £1,000,000 limit). The pool is then: £20,000 less disposal proceeds £5,000 = £15,000, and WDA at 18% gives £2,700. Total = £30,000 + £2,700 = £32,700. Rechecking the options: none equals £32,700, so the correct choice must be rebuilt as shown below.

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