A fixed asset register is a list of every asset the business has capitalised, recording what it is, where it is, what it cost, when it came into use, how it is depreciated and how it has been treated for capital allowances. It is the evidence behind the fixed asset figures and notes in the accounts, and it is what lets a business work out the correct balancing charge or allowance when an asset is sold or scrapped.

Does a business have to keep a fixed asset register?

No law prescribes a register in a particular format, but the obligation behind it is clear. Section 386 of the Companies Act 2006 requires every company to keep adequate accounting records, which must in particular contain a record of the assets and liabilities of the company. GOV.UK guidance on company records lists details of assets owned by the company among the accounting records that must be kept. HMRC also needs the information to check capital allowances claims, and HMRC can charge a penalty for failing to keep adequate records.

For a business with a handful of assets a spreadsheet is enough. Larger businesses use the fixed asset module of their accounting software, which posts depreciation automatically. Either way the register should agree to the cost and accumulated depreciation balances in the nominal ledger at every month or year end.

What should each entry record?

Field Why it is needed
Asset number, description, serial number and location Identifies the item for physical checks, insurance and disposal
Supplier, invoice reference and date of purchase Evidence of cost and of when expenditure was incurred
Date available for use Depreciation starts from this date (FRS 102 paragraph 17.20)
Cost, split into components where relevant Purchase price plus directly attributable costs such as delivery and installation (paragraph 17.10); major components with different lives are depreciated separately (paragraph 17.16)
Asset class, useful life, residual value and depreciation method Drives the depreciation charge and the policy note
Accumulated depreciation, impairment and any revaluation Gives the carrying amount
Capital allowance claimed and pool Annual investment allowance, full expensing, a first year allowance, main pool, special rate pool or single asset pool
Security or restrictions Assets pledged as security must be disclosed (paragraph 17.32(a))
Disposal date, proceeds and reason Needed for the gain or loss in the accounts and the disposal value for tax

Paragraph 17.11 lists costs that must not be capitalised, including the costs of opening a new facility, staff training and general overheads. The register is a useful control here: if an item cannot be given a description, a location and a useful life, it probably should not be on it. The boundary between capital and revenue spending is explained in capital vs revenue expenditure.

How does the register support the accounts?

FRS 102 paragraph 17.31 requires, for each class of property, plant and equipment, the depreciation methods and useful lives used, the gross carrying amount and accumulated depreciation at the start and end of the period, and a reconciliation showing additions, disposals, revaluations, impairments, depreciation and other changes. Small entities applying Section 1A must give a similar movement analysis for each class of fixed assets under paragraphs 1AC.12 and 1AC.13. A register that records additions, disposals and depreciation by class produces this note directly.

On disposal, paragraph 17.30 measures the gain or loss as net disposal proceeds less the carrying amount, and paragraph 17.28 says it goes to profit or loss and is not revenue. That needs the cost and accumulated depreciation of the specific asset, which only an item level register holds. Paragraph 17.20 adds that depreciation does not stop because an asset is idle or retired from active use, unless it is fully depreciated, so assets out of use stay on the register until they are actually disposed of or derecognised. The methods themselves are covered in depreciation methods and the wider standard in property, plant and equipment under FRS 102.

How does it support capital allowances?

Depreciation is not deductible for tax; capital allowances are given instead, and the register is where the two systems meet. For each asset it should record which allowance was claimed, because the treatment on disposal depends on it.

  • Pools and rates. GOV.UK guidance says the main pool writing down allowance changed from 18% to 14% on 1 April 2026 for corporation tax and 6 April 2026 for income tax, and the special rate pool rate is 6%. Integral features such as heating and lighting systems go into the special rate pool, so they should be recorded separately from the building works around them.
  • Assets written off in full. Where the annual investment allowance or a 100% first year allowance was claimed, GOV.UK guidance says the item should still be recorded in the pool it qualifies for at a value of zero, which helps you work out whether tax is due when it is sold.
  • Full expensing. When a company sells an asset on which it claimed full expensing, a balancing charge arises equal to the relevant proportion of the disposal value, and that part is not deducted from the pool. HMRC’s Capital Allowances Manual at CA23174AD explains that the relevant proportion is the expenditure on which full expensing was claimed divided by the total expenditure on the asset. Without the original split in the register, the charge cannot be calculated.
  • Short life assets. Assets in a short life pool are tracked individually; GOV.UK guidance says the balance moves to the main pool if the item is still in use after 8 years.
  • Timing. Section 5 of the Capital Allowances Act 2001 treats capital expenditure as incurred when there is an unconditional obligation to pay, so the register should hold the contract and delivery dates, not just the invoice date.
  • Buildings. A claim to the structures and buildings allowance requires an allowance statement under section 270IA of the Capital Allowances Act 2001, showing the date of the earliest construction contract, the qualifying expenditure and the date the building was first brought into non residential use. Keep it with the register entry.

What does a worked example look like?

Illustration only. A company with a 31 March year end bought a van for £30,000 in April 2024 and claimed the annual investment allowance in full. It depreciates vans over five years straight line with no residual value. It sells the van for £14,000 in March 2027, and has nothing left in the main pool.

Accounts Tax
Cost £30,000 £30,000, all relieved by annual investment allowance
Written off before sale £18,000 depreciation (three years) £30,000
Value at sale £12,000 carrying amount Nil
Result on sale for £14,000 £2,000 profit on disposal £14,000 balancing charge

The accounts profit is added back and the balancing charge is taxed instead. Both figures come straight from the register.

How long should the records be kept?

Section 388 of the Companies Act 2006 requires a private company to preserve its accounting records for three years from the date they are made, and a public company for six. For tax, GOV.UK guidance says company records must be kept for 6 years from the end of the last financial year they relate to, or longer if, among other things, the company has bought something it expects to last more than 6 years, such as equipment or machinery. Sole traders must keep records for at least 5 years after the 31 January submission deadline of the relevant tax year. In practice, purchase invoices and allowance records for long lived assets are kept for as long as the asset is owned and for the full period after its disposal.

How should the register be maintained?

  • Agree the register to the nominal ledger cost and depreciation accounts at each year end and investigate any difference.
  • Check physically that a sample of assets exists and that a sample of items in the building is on the register.
  • Remove scrapped, lost and stolen items, recording any insurance proceeds, which count as a disposal for capital allowances under GOV.UK guidance.
  • Review useful lives and residual values when there is an indication they have changed.
  • Apply a written capitalisation threshold consistently so small items are expensed rather than registered.

What mistakes come up most often?

  • Recording assets only in pools for tax, so the accounts note and the gain or loss on disposal cannot be produced.
  • Not recording which allowance was claimed on each asset, which makes full expensing balancing charges impossible to calculate.
  • Leaving sold or scrapped assets on the register, so depreciation continues on items the business no longer owns.
  • Capitalising training, repairs or general overheads.
  • Losing the structures and buildings allowance statement when premises change hands.

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Sources

Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 8 October 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.