HMRC have created a "ready reckoner" to help those who have accounting periods which span the date of the change in in the Writing Down Allowance (WDA) for business expenditure on plant and machinery changed from:

• 1 April 2008 for companies, and
  
• 6 April 2008 for the self-employed.

The rates on the change as follows:

• from 25 to 20 per cent for general plant and machinery
  
• from 6 to 10 per cent for long-life plant and machinery

A transitional, hybrid rate has to be used for those business whose chargeable period spans the relevant change date. The ready reckonereckoner will make this calculation for any business affected.

The hybrid rate is arrived at by calculating:

• the rate for the portion of the chargeable period falling before the change date
  
• the rate for the portion falling after that date
  
• adding the two rates together

For example, if a company’s chargeable period began on 1 January 2008 and ended on 31 December 2008, 91 days would fall before the change date (1 April 2008), and 275 days would fall after that date. The calculation of the hybrid rate for general plant and machinery would be as follows:

• 91/366 x 25% = 6.22%
  
• Plus, 275/366 x 20% = 15.03%
  
• Hybrid rate for transitional period = 21.25%

The Ready Reckoner will similarly calculate the hybrid rate of WDA for any business with long-life asset* expenditure.
(*Long-life assets are assets with a useful economic life, when new, of 25 years or more. However, this rate only applies to businesses that have spent more than £100,000 on long-life assets in a chargeable period of a year.)

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