Annual Investment Allowance - all change again

Date: 13/12/12

Annual Investment Allowance - all change again

In his recent Autumn Statement, the Chancellor announced a number of changes which will impact on businesses in forthcoming tax years.  One of the more immediate changes is the temporary increase in the Annual Investment Allowance (AIA) from £25,000 to £250,000 per annum.  This planned increase is expected to last for two years and will take effect from 1 January 2013.

The AIA allows the full cost up to the AIA limit of qualifying plant and machinery to be deducted from businesses’ taxable profits in the year of purchase.  Therefore, businesses which intend to purchase significant plant and machinery in the immediate future, may wish to consider delaying this purchase until 1 January 2013 or later.

For accounting periods which span 1 January 2013 transitional provisions will apply, where businesses will receive a proportion of the full £250,000 AIA.

Before acting on this brief, we would first recommend that you speak with your usual contact at our office, as there may be additional rules to consider.

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