Depreciation Calculator UK
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Straight-Line Depreciation Calculator UK 2026 | Free Asset Depreciation Tool
📊 Updated for 2026 — UK GAAP FRS 102 Aligned

Straight-Line Depreciation
Calculator UK

Calculate straight-line depreciation for any UK business asset. Generates a full year-by-year schedule with opening values, annual charge, accumulated depreciation and net book value. Aligned with UK GAAP FRS 102 and HMRC 2026 guidance.

Equal
Annual Charge Every Year
FRS 102
UK GAAP Standard 2026
£1M
HMRC AIA Limit 2026
14%
Main Pool WDA (Apr 2026)
⚠️ Important: Straight-line depreciation is an accounting method used in your profit & loss accounts and balance sheet under UK GAAP (FRS 102). HMRC does not allow depreciation as a tax deduction — instead, you claim Capital Allowances (AIA, WDA, FYA) on your tax return. The main pool Writing Down Allowance drops from 18% to 14% from April 2026. See HMRC Capital Allowances ↗

What Is Straight-Line Depreciation in the UK?

The straight-line method is the most widely used depreciation approach for UK business accounting under FRS 102.

Straight-line depreciation spreads the cost of a fixed asset evenly across its useful life, producing an equal charge to the profit and loss account each year. It is the most straightforward and commonly used method for UK businesses preparing accounts under UK GAAP (FRS 102) or IFRS, particularly for assets with a predictable and consistent pattern of use — such as office furniture, fixtures, fittings and some categories of plant and machinery.

The formula is simple: subtract the asset's estimated residual (salvage) value from its purchase cost, then divide by the number of years of useful life. The result is the fixed annual depreciation charge. For example, a machine purchased for £20,000 with a £2,000 salvage value and a 6-year life would attract a straight-line depreciation charge of £3,000 per year (£18,000 ÷ 6). Use our UK Business Asset Depreciation Calculator if you also need reducing balance or HMRC WDA projections.

It is critical to understand that this accounting depreciation figure is added back when preparing a UK Corporation Tax return, and replaced with the relevant capital allowance claim (Annual Investment Allowance, Writing Down Allowance or the new 40% First-Year Allowance introduced from January 2026). The two figures are often different, creating a timing difference on the balance sheet known as a deferred tax liability or asset.

Straight-Line Depreciation Calculator UK

Choose a calculator below — standard full-year, partial year pro-rata, or batch multiple assets at once.

Optional — shown in the depreciation schedule header
Total purchase price including delivery, installation and non-recoverable VAT
Estimated value at end of useful life. Enter 0 if nil residual value expected.
Typical UK ranges: IT 3–5 yrs, vehicles 3–5 yrs, machinery 5–15 yrs, fixtures 10–15 yrs
Used to calculate the pro-rata first and last year depreciation charges

Enter multiple assets below to calculate and compare their annual straight-line depreciation charges side by side.

Straight-Line Depreciation vs HMRC Capital Allowances in 2026

Understanding the difference between your accounting depreciation and your HMRC tax claim is essential for UK businesses.

When you prepare your annual accounts, straight-line depreciation reduces the book value of fixed assets each year and is charged to the profit and loss account. However, when you complete your Corporation Tax return (CT600) or Self Assessment (SA), HMRC requires you to add back the depreciation charge and instead claim the applicable capital allowance — such as the Annual Investment Allowance (AIA) at 100%, the main pool Writing Down Allowance (WDA) at 14% from April 2026, or the new 40% First-Year Allowance (FYA) available from January 2026.

This means a single asset can have two different "depreciation" figures in the same year: the accounting figure (e.g. straight-line at 20%) and the tax figure (e.g. AIA at 100% in year one). The difference between these two figures creates a deferred tax position on the balance sheet — a temporary timing difference that reverses over the asset's life. Most accounting software (Xero, QuickBooks, Sage) will handle this automatically if the asset register is set up correctly.

For sole traders and partnerships filing Self Assessment returns, the same principle applies. Your profit and loss account will show the accounting depreciation, but your tax computation will disallow it and replace it with the relevant capital allowance claim. Always consult a qualified UK accountant if you are unsure which capital allowances your assets qualify for under the 2026 rules.

Typical Useful Life & Depreciation Rates for UK Assets 2026

Common straight-line depreciation rates and useful life estimates used by UK businesses under FRS 102.

IT Equipment & Computers

25–33%

Useful life 3–4 years. Rapid obsolescence means higher annual depreciation rates. Laptops, servers, phones and peripherals typically 3 years.

Motor Vehicles

20–25%

Useful life 4–5 years. Cars and vans commonly depreciated over 4 years with a residual value of 10–20% of purchase cost.

Plant & Machinery

10–20%

Useful life 5–10 years. Production equipment, industrial machinery and tools. Rate depends on intensity of use and maintenance.

Fixtures & Fittings

7–10%

Useful life 10–15 years. Office fit-outs, shopfronts and installed fittings. Often depreciated at 10% straight-line under UK GAAP.

Office Furniture

10–20%

Useful life 5–10 years. Desks, chairs and shelving. Commonly 10% straight-line for corporate accounts; shorter for hot-desking environments.

Commercial Buildings SBA 3%

2–4%

Useful life 25–50 years. The Structures & Buildings Allowance (SBA) allows 3% per year for qualifying construction costs for tax purposes.

How to Use the Straight-Line Depreciation Calculator

Four simple steps to generate your full UK straight-line depreciation schedule.

1

Enter Asset Cost

Input the total purchase price of the asset including delivery, installation costs and any non-recoverable VAT that forms part of the capitalised cost.

2

Set Residual Value

Enter the expected salvage or residual value at the end of the asset's useful life. If you expect no value, enter £0. This directly affects your annual depreciation charge.

3

Choose Useful Life

Select the number of years the asset will be used by the business. Use the typical UK useful life guide in the rates section above as a reference point.

4

Generate Schedule

Click Calculate to instantly produce a full year-by-year depreciation schedule showing opening value, annual charge, cumulative depreciation and net book value.

UK Depreciation Methods Compared

How straight-line depreciation compares to other common UK accounting and tax methods.

📐 Straight-Line Method

Annual Charge = (Cost − Salvage Value) ÷ Useful Life (Years)
  • Equal depreciation charge every year
  • Simple to calculate and audit
  • Most common under UK GAAP FRS 102
  • Best for assets with uniform usage patterns
  • Ideal for furniture, fixtures, IT and buildings fit-out

📉 Reducing Balance Method

Annual Charge = Opening Book Value × Rate %
  • Higher charges in early years, lower later
  • Reflects faster real-world value decline
  • Better for vehicles and technology assets
  • Mirrors HMRC's WDA approach for tax purposes
  • Use our Reducing Balance Calculator for this method

🏛️ HMRC Capital Allowances 2026

Tax Relief = AIA (100%) or WDA (14% / 6%) or FYA (40%)
  • Used for tax return — not accounting profit
  • AIA gives 100% relief up to £1M in year of purchase
  • Main pool WDA reduced to 14% from April 2026
  • New 40% FYA available from January 2026
  • Use our HMRC Capital Allowances Calculator

Further Tools & Official Guidance

Related UK depreciation calculators and official HMRC resources to support your asset accounting.

🔗 Related Calculators

🌐 Official HMRC & UK GAAP Guidance

Frequently Asked Questions

Common questions about straight-line depreciation for UK businesses in 2026.

What is the straight-line depreciation formula in the UK?
The straight-line depreciation formula used in the UK is: Annual Depreciation = (Cost of Asset − Residual / Salvage Value) ÷ Useful Life in Years. For example, an asset costing £10,000 with a £1,000 residual value and a 5-year useful life would have an annual straight-line depreciation charge of £1,800 per year (£9,000 ÷ 5). This charge is recorded each year in the profit and loss account and the asset's net book value on the balance sheet reduces by £1,800 annually until it reaches the residual value.
Does HMRC accept straight-line depreciation as a tax deduction?
No. HMRC does not allow depreciation as a deductible expense for UK tax purposes, whether calculated using the straight-line method or any other accounting method. Instead, you must add back the depreciation charge in your tax computation and replace it with the relevant HMRC capital allowance claim — such as the Annual Investment Allowance (AIA), Writing Down Allowance (WDA) or the new 40% First-Year Allowance (FYA) introduced from January 2026. This is a fundamental difference between accounting profit and taxable profit in the UK.
What is the difference between straight-line and reducing balance depreciation?
Straight-line depreciation produces the same fixed charge to the profit and loss account every year. Reducing balance depreciation applies a fixed percentage rate to the asset's remaining book value each year, meaning the charge is higher in early years and gradually reduces over time. For example, a £10,000 asset depreciated at 20% straight-line loses £2,000 per year, whereas at 20% reducing balance it loses £2,000 in year 1, £1,600 in year 2, £1,280 in year 3, and so on. Straight-line is preferred for assets with even usage; reducing balance better reflects the faster value decline of vehicles and technology.
What is a residual or salvage value and do I need to include one?
The residual value (also called salvage value or scrap value) is the estimated amount the asset will be worth at the end of its useful life — either from resale, part-exchange or scrap. Under UK GAAP FRS 102, residual values must be estimated and reviewed at the end of each reporting period. If you expect the asset to have no value at the end of its life (e.g. computer equipment), enter £0. Many UK businesses set residual value to nil for simplicity, which means the full cost is depreciated over the asset's useful life. Residual value should be entered net of expected disposal costs.
How do I calculate depreciation if I buy an asset part way through the year?
If an asset is purchased part way through an accounting year, most UK businesses apply a pro-rata (time-apportioned) depreciation charge in the first year. For example, if an asset with an annual depreciation charge of £3,000 is purchased on 1 October in a 31 December year-end business, only 3 months of depreciation (£750) would be charged in that first year. The calculator's "Partial Year (Pro-Rata)" tab handles this automatically — simply enter the month of purchase and it calculates the correct first and final year charges. Some businesses adopt a simpler "full year in year of acquisition" policy — this must be applied consistently across all assets.
What is net book value (NBV) and how does straight-line depreciation affect it?
Net book value (NBV) is the value of a fixed asset shown on the balance sheet after deducting accumulated depreciation from the original cost. Under straight-line depreciation, the NBV declines by the same fixed amount each year until it reaches the residual value at the end of the asset's useful life. For example, an asset costing £10,000 depreciated at £2,000 per year will have an NBV of £8,000 after year 1, £6,000 after year 2, and so on. At the end of year 5 the NBV equals the residual value (£0 if nil residual was assumed). The depreciation schedule generated by this calculator shows the NBV at the end of each year.
Can I change the depreciation method mid-life of an asset?
Under UK GAAP FRS 102, depreciation methods and useful lives must be reviewed at the end of each reporting period and changed if there has been a significant change in the expected pattern of consumption of the asset's future economic benefits. A change in depreciation method is treated as a change in accounting estimate — not a change in accounting policy — and is applied prospectively from the date of the change. This means the remaining book value (after deducting accumulated depreciation to date) is spread over the remaining useful life using the new method. Any change must be disclosed in the notes to the financial statements.
What is the minimum threshold for capitalising an asset in the UK?
There is no statutory minimum capitalisation threshold in the UK — it is a matter of accounting policy. However, most UK small and medium-sized businesses set a capitalisation threshold (often between £500 and £2,000) below which assets are expensed directly to the profit and loss account rather than capitalised and depreciated. This threshold should be set consistently in your accounting policy note. Items below the threshold are treated as revenue expenditure in the period of purchase, rather than as capital expenditure subject to depreciation over multiple years.
Which accounting software handles straight-line depreciation automatically in the UK?
The most popular UK cloud accounting platforms that automate straight-line depreciation include Xero, QuickBooks Online, Sage 50 and FreeAgent. Once you set up a fixed asset with the cost, residual value, useful life and start date, these platforms automatically post the depreciation journal each month or year and maintain the asset register. They also generate the fixed asset schedule needed for your statutory accounts. For sole traders and landlords, simpler tools such as Coconut or ANNA Money also offer basic asset depreciation tracking. Always verify the depreciation charge against this calculator to ensure accuracy.
Is straight-line depreciation suitable for all UK business assets?
Straight-line depreciation is appropriate for assets that are used evenly over their useful life and whose value declines at a consistent rate — such as office furniture, fixtures and fittings, software licences (with fixed terms), and some categories of plant and machinery. It is less appropriate for vehicles and high-technology assets that lose a disproportionate amount of value in the early years, where reducing balance depreciation gives a more faithful representation of the asset's value. Under FRS 102, the method chosen must reflect the pattern in which the asset's economic benefits are consumed by the business, so the method should be reviewed asset-by-asset rather than applied uniformly across all fixed asset categories.