The Annual Investment Allowance (AIA) provides a 100% tax write off for the cost of most plant and machinery acquired by businesses, a notable exception being motor cars. In Budget 2014 the Chancellor announced that the allowance would be increased to £500,000 per annum for expenditure incurred between 1 April 2014 and 31 December 2015 (from 6 April 2014 for unincorporated businesses).
This generous allowance was due to fall to just £25,000 from 1 January 2016 and the Chancellor acknowledged that such a level would be too low.
However, the new limit will not be announced until later this year. Remember that the AIA is available for assets bought on hire purchase as well as those bought for cash. It can also be claimed in respect of fixtures and fittings within buildings.
Contact us to help you maximise tax relief for capital expenditure as the timing of expenditure can be critical.