How do I record depreciation and fixed assets?
Enter a fixed asset purchase twice. Enter it first on the Purchases workbook with code FA. Then enter it on the Fixedassets workbook, on the Schedule, in the New Assets section. The workbook then works out depreciation for your accounts and the capital allowances for your tax.
Depreciation and capital allowances are two figures
Depreciation is the accounting charge that spreads the cost of an asset over its life. Capital allowances are a type of tax relief for businesses.[1] The package keeps the two apart, because the accounts and the tax return use different figures. The Fixedassets schedule shows both.
The steps
- Enter the purchase on the Purchases workbook with code FA.
- Open Fixedassets, Schedule, and go to the New Assets section. Its heading is on Row 59 in the Company Accounts and Self Employed packages. Enter a car on the Cars rows and not on a Plant row.
- Enter the asset, its cost and its category on the schedule.
- Check the result on the Fixedassets reconciliation. In the Self Employed package, Row 15 of FAreconciliation is zero when every purchase and sale is on the schedule.
The preset depreciation rates
The Company Accounts and Self Employed packages preset these depreciation rates: land and buildings 0%, plant and machinery 10%, fixtures and fittings 20%, computer equipment 33% and motor vehicles 25%.
Opening assets
Assets you bought in an earlier year go in the existing assets section at the top of the schedule. In the Company Accounts package, also enter the original cost and the accumulated depreciation at Financialaccounts, OpenAccounts. In the Basic Sole Trader package, enter the written down value after the allowances already claimed. That is not the depreciated value of the asset.
A vehicle also used privately takes a private use percentage. The percentage reduces the allowances claimed by the same share. The Taxi Driver package asks for the percentage in column F of the schedule.
Capital allowance rates to check
The package applies the allowance rates preset for its year. Compare them with HMRC's rates. The annual investment allowance is £1 million.[2] The main writing down allowance rate changed from 18% to 14% on 1 April 2026 for Corporation Tax and on 6 April 2026 for Income Tax.[3] The special rate pool has a rate of 6%.[4]
A car can fall in the special rate pool. The threshold depends on the car and when you bought it.[5] Check HMRC's rates and pools page for your car.
Related articles
See where a car goes in the fixed assets workbook, capital allowances and written down book value and tax value for more on the difference between the two values.
Article generated by Claude Code for DIY Accounting, November 2026. All information sourced from GOV.UK and HMRC guidance linked inline.
Tax reference: capital allowances – Source: GOV.UK: Claim capital allowances; GOV.UK: Annual investment allowance; GOV.UK: Work out your capital allowances: rates and pools
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