capital allowances a standardized method of giving relief for depreciation for tax purposes, only available for certain classes of capital expenditure. The most common qualifying categories of expenditure are on plant and machinery, industrial buildings and on agricultural buildings and works. Depreciation in the accounts is disallowed for tax purposes and is replaced by capital allowances on those assets which qualify. In order to encourage businesses to invest, there are sometimes generous rates of allowance in the period of acquisition (initial allowances or first-year allowances). Any remaining expenditure which has not been relieved is given by means of a writing down allowance at a specified percentage rate per annum. On a disposal, a comparison is made between the disposal value and the tax written down value so that an adjustment can be made to ensure that the total relief equals the reduction in value while the person owned the asset. If too little relief has been given, a balancing allowance is provided and where too much relief has been given, the excess is added to income and is called a balancing charge.