If you own a marketing agency, digital agency, or creative agency, you have likely spent money on computers, office furniture, software, or leasehold improvements. Those costs do not simply disappear in your accounts. Through capital allowances, you can claim tax relief on them. But the rates at which you claim that relief have changed.
Writing down allowance rates determine how much of your capital expenditure you can deduct from your profits each year. From April 2026, the main rate dropped from 18% to 14%, and the special rate pool fell from 6% to 4% [1][2]. If you are planning a significant equipment purchase or a studio fit-out, these changes matter.
This article covers what writing down allowances are, how the rates work, what qualifies for each pool, and what the recent changes mean for your agency. Working exclusively with agency founders, we see these rules misapplied more often than you would expect. Let us fix that.
What Are Writing Down Allowances?
Writing down allowances (WDAs) are a type of capital allowance. They let you claim tax relief on the depreciation of plant and machinery over time. Instead of deducting the full cost in one year (which you can do with the Annual Investment Allowance up to £1 million), WDAs spread the relief across multiple years [1].
You claim WDAs when an asset does not qualify for another allowance, or when there is value remaining after claiming the maximum amount of another allowance [3]. For example, if you buy a server for £20,000 and claim £10,000 of Annual Investment Allowance, the remaining £10,000 goes into your main pool and attracts WDAs at the relevant rate.
Think of it as the default mechanism. If you cannot use a first-year allowance or the AIA, WDAs are what you fall back on.
The Two Pools: Main Rate and Special Rate
HMRC splits plant and machinery into two pools. Each pool has its own writing down allowance rate.
Main Rate Pool (18% before April 2026, 14% from April 2026)
The main rate pool covers most plant and machinery. For a typical agency, this includes:
- Computers, laptops, and monitors
- Office furniture (desks, chairs, shelving)
- Servers and networking equipment
- Tools and equipment used directly in your business
- Fixtures and fittings that are not integral to the building
Before 1 April 2026 (for Corporation Tax) and 6 April 2026 (for Income Tax), the main rate was 18%. It is now 14% [1]. That means you claim 14% of the pool value each year on a reducing balance basis.
Special Rate Pool (6% before April 2026, 4% from April 2026)
The special rate pool covers assets with a longer useful life or those considered integral to a building. This includes:
- Integral features: lifts, escalators, air conditioning, heating systems, electrical systems, water systems
- Long-life assets: items with an expected useful life of 25 years or more, where the total cost of such items in an accounting period exceeds £100,000 [1]
- Thermal insulation added to an existing building
- Solar panels
The special rate was 6% before April 2026. It dropped to 4% from April 2026 [2].
If the value of all long-life items you buy in an accounting period is more than £100,000, put the costs in the special rate pool. If it totals £100,000 or less, put the costs in the main rate pool unless there is another factor that would qualify it as special rate [1].
How the Rates Changed in 2026
The government announced the rate changes in the Spring Statement 2022, intending to increase the main rate from 18% to 20% and the special rate from 6% to 8% [4]. That did not happen. Instead, from April 2026, the main rate dropped to 14% and the special rate dropped to 4% [1][2].
Here is the summary:
| Pool | Rate before April 2026 | Rate from April 2026 |
|---|---|---|
| Main rate pool | 18% | 14% |
| Special rate pool | 6% | 4% |
For Corporation Tax, the change took effect on 1 April 2026. For Income Tax (sole traders and partnerships), it took effect on 6 April 2026 [1].
The Annual Investment Allowance remains at £1 million for 2026/27, and the 100% first-year allowance for zero-emission cars and goods vehicles also continues [2]. So for most agency equipment purchases, you will still use the AIA first and only fall back on WDAs for the balance.
What This Means for Your Agency
If your agency has a large pool of existing assets, the rate drop means you will claim tax relief more slowly on those assets going forward. That is not necessarily bad news if you are planning significant new investment, because the AIA still covers the first £1 million of qualifying expenditure.
But there are two scenarios where the rate change bites.
Scenario 1: You have a large pool balance with no new purchases. If your agency bought heavily in previous years and is now in a quieter investment phase, your pool balance may be substantial. At 18%, that pool would have reduced relatively quickly. At 14%, it takes longer. Your tax relief is spread over more years.
Scenario 2: You are buying integral features for a studio or office fit-out. If you are renovating a space in Shoreditch or Bristol Harbourside, you might spend £150,000 on air conditioning, lighting, and electrical systems. Those are special rate assets. At 6%, you would have claimed £9,000 in year one. At 4%, you claim £6,000. The difference is £3,000 of tax relief lost in the first year.