You have several elements of this question that you need to consider.

1) Writing off the old computer
For tax purposes I will assume that this will have been written off to the Annual investment allowance but for accountiing purposes it will still be being written off theough the books. You need to write off the remaining value of the asset as an expense through the P&L (effectively escalating the depreciation)

The writing off of a destroyed asset triggers a disposal event. The asset will be considered disposed of in the tax return at the value of the compensation received for it (much the same as an insurance claim), the disposal proceeds are recognised as a balancing charge

2) Handling the compensation
This is compensaton the same as an insurance claim and will be taxable. You would recognise it as other income, not trading income.

Don't worry that the compensation will be taxed as your tax liability will be reduced by the purchase of a new asset (see below).

Think about that. Say profit is increased by £400 as a result of the compensation received as other income.

The purchase of an asset for £400 claimed as AIA effectively reduces the taxable profits by the same amount. (lets not clutter this answer up with WDA's rather than AIA, or being VAT registered as that simply adjusts where / when the relief occurs).

Remember though that through your tax computation you will need to introdce a balancing charge for the asset disposed of at the level of the compensation received.

3) Purchase of the new computer

Purchase as normal, depreciate through the books and claim AIA or WDA through tax.

There is no real link between the old (now destroyed) computer for which taxable compensation was received and it's replacement which may be a completely different price to what was replaced.

You are not getting two lots of AIA on effectively the same asset as the disposal (loss) triggered a balancing charge resulting in a taxable event.

4) Conclusion

This is not complex but it can still be confusing at first glance as you are playing in an area where there is variance between paper and real profits plus there is the balancing charge to be considered for the disposal.

From the bookkeeping perspective you need to account for the disposal (no depreciation but apply adjustment escalating the write off through the P&L), the acquisition (as normal. capitalise & depreciate) and the compensation (as other income).

Hope that helps,

kindest regards,

Shaun.