Don't miss out on temporary AIA increase
Date: 10/12/13
Businesses have just over a year left to take advantage of a temporary ten-fold increase in the annual investment allowance (AIA) for plant and machinery.
The AIA, which enables business owners to write off a certain amount of their qualifying expenditure against taxable profits, was increased from £25,000 to £250,000 on 1 January this year.
However, this increase is temporary and will only last until the end of December 2014. It is then likely to be reduced to £25,000 again.
The increased allowance came as welcome news to many smaller and medium-sized businesses that needed to invest in new equipment to help them grow their business.
However, this higher allowance will only last for another year and while that may seem a long time, businesses wishing to take advantage of this valuable relief need to start planning their expenditure now to make sure it goes through before the deadline.
The annual investment allowance offers a very helpful cash flow advantage for businesses needing to invest in plant and machinery. For businesses wishing to maximise this advantage, and in particular for those businesses with accounting year ends that straddle the December 2014 closing date for the higher allowance, they should seek advice to confirm how the changing allowance will affect their business. It is best to seek professional advice as soon as possible to find out if your expenditure will be eligible and, if so, to ensure that any investment is as tax-efficient as possible.
For further information, please contact Tim Preece at the office.
Author: Tim Preece FCCA
A former pupil at Lancaster Royal Grammar School, Tim joined Scott & Wilkinson in 1992 as a trainee after completing a degree in Maths and Economics at Leeds University and qualified as an Accountant in 1996. Tim was...
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