A balancing charge is an amount that may be due when an individual or business dispose of an asset that has been used for both personal and business purposes. The balancing charge is the difference between the proceeds from the disposal of the asset and its original cost.

For example, if an individual purchases a car for £10,000 and uses it both for personal and business purposes, they may be eligible for a tax deduction on a portion of the car's cost. If the individual sells the car for £7,000, they may be required to pay a balancing charge of £3,000 (the difference between the sale price and the original cost).

The purpose of the balancing charge is to ensure that individuals and businesses are only able to claim tax deductions for the business use of an asset. It is important for individuals and businesses to keep accurate records of the business use of assets in order to properly calculate any balancing charges that may be due.