Back

⚠️ Hey, you are using an outdated web browser.
TaxScouts might not work with your browser. Upgrade here

Let us sort your Self Assessment online. £119, all in. Learn more

Balancing Charge

A balancing charge is something HMRC uses to prevent you from claiming too much tax relief for a piece of equipment.

If you’re self-employed and you buy a laptop, for instance, you can claim capital allowances like the Annual Investment Allowance (AIA) for the cost of it.

If you later sell the laptop, you might need to add a balancing charge to your profit and pay tax on it. The balancing charge is the capital allowance you claimed for the laptop minus the resale price. 

But what does this mean in practice?

The balancing charge in action

what is the balancing charge

 

Hey there! We really hope this article helped you. Tax matters can be a dreadful topic at times. We know. That's why we started TaxScouts.
A stress-free way to getting your taxes done.

Have a minute? See how it works

More guides & useful information

Related terms

Let us sort your Self Assessment online. £119, all in.

That’s right. No matter how complicated it gets or why you need to do a return in the first place, it’ll cost £119 to get it done. That includes VAT, last-minute changes and all the support you may need.

How it works

1. Answer a few simple questions

And we mean a few. After a couple of minutes of answering questions online we’ll have everything we need to start working on your tax return.

2. Then get paired with a tax accountant

That’s right, you’ll be matched with a real accountant who is best suited to prepare your return. Plus, they’re on hand for questions whenever you need.

3. We file your Self Assessment for you

Once you’ve signed off your return, your TaxScouts accountant will file your return online with HMRC. That’s it! We told you it was simple.