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Balancing adjustments may be required when an employee ceases employment or sells or otherwise disposes of an asset for which plant or machinery allowances have been claimed.

Example

A salesman working from home ceases employment on 30 November 2025. He had previously claimed Annual Investment Allowance on the full cost of a laptop which was necessarily provided for his employment. The laptop originally cost 拢3000. Upon cessation of employment, he decides to keep the laptop for his own personal use. At this point, its market value is 拢1500. The salesman is required to bring into account a disposal value of 拢1500, which gives rise to a balancing charge of 拢1500.

If in the above example, the salesman had made an apportionment for 20% private use when claiming the AIA and had accordingly only claimed 拢2400 (拢3000 x 80% = 拢2400), the balancing charge would be adjusted on a similar basis, so that the cessation of employment would give rise to a balancing charge of 拢1200 (拢1500 x 80% = 拢1200).