Annual Investment Allowance Extended

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Annual Investment Allowance extended - what it means for you

The Annual Investment Allowance (AIA) is a Government initiative designed to help businesses buy the plant and machinery they need.  Now, the scheme's benefits have been temporarily extended.  Here's our quick explainer of how it works:

 

What is it?

The AIA is a capital allowance which allows you to deduct the full value of any qualifying items up to £1m from your pre-tax profit in the year of purchase.  As such, AIA accelerates the tax relief you can claim on the equipment you buy.

 

Who can benefit?

Any UK business, excluding partnerships where one of the partners is a company or another partnership.

 

Why does the scheme exist?

It's all about helping you invest and keeping you competitive in the market place while minimising the impact of purchases upon your cashflow.

 

When can I apply?

Now, but do be aware the £1m ceiling is an extension that runs until 31 March 2023 (prior to the extension being introduced, the AIA limit was £200,000).  Also, if you want to claim the full value, you must claim in the accounting period in which you purchased the item.

 

Next steps

If you are looking to purchase any qualifying plant or machinery, check lead times with your supplier as tax relief under the scheme is only available in the year of purchase.  Should you require a tailored financial solution to enable you to acquire the assets you need, contact us today – our team is on hand and ready to assist.

 

Full details about the AIA scheme are available on the www.gov.co.uk website here.

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