B · Glossary
Balancing Charge
Tax charge when you sell a business asset for more than its written-down value.
A Balancing Charge arises when you sell or stop using a business asset that has been claimed under capital allowances, and the disposal value exceeds the asset's written-down value (WDV). The excess is added back to taxable profit.
Example: car bought for £20k, claimed allowances down to WDV of £8k, sold for £12k — £4k balancing charge added to profits.
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