Annual investment allowance raised to £1 million
At a time when many are focused on the impact of Brexit, it’s important to be aware of other changes that can have a positive impact on your business. The updates from October’s budget announced a significant change for UK businesses, with the annual investment allowance (AIA) reaching a staggering £1 million.
AIA is a form of tax relief that British businesses are able to claim on assets they purchase. So when you buy things such as machines, tools, trucks and diggers, the cost (in some cases 100%) can be deducted from the business profit before working out tax.
From 1st January 2019, the allowance each business can claim has temporarily increased fivefold from £200,000 to £1 million until the end of 2020. The chancellor has stated that the increase is part of the governments aim to ‘stimulate business investment.’ According to HMRC statistics, this will affect around 30,000 UK businesses that currently exceed the £200,000 limit, and should encourage all businesses to keep investing and grow ahead of and throughout Brexit.
At an all time high, the rise is a fantastic opportunity so it is important to time large items of capital well. You may wish to review your commercial vehicle requirements and ensure you take full advantage of this temporary increase. You can find more information here, but if you have any questions regarding the AIA, be sure to discuss it with your accountant.