Writing Down Allowance (WDA)

Formal

A type of tax allowance used in the UK based upon the amount of fixed assets used in the business. These WDAs reduce the tax bills of companies that would otherwise be liable to taxation on their profits.

Real-world Example

A company buys $50,000 of equipment and claims a Writing Down Allowance each year, reducing its taxable profit gradually as the asset's value is written down for tax purposes, similar in principle to depreciation.