11-09-2019
What is the Annual Investment Allowance?

The Annual Investment Allowance (AIA) is a generous tax relief that was first introduced in 2008. The AIA allows for the total amount of qualifying expenditure on plant, machinery, commercial vehicles and other qualifying equipment to be deducted from your profits before tax.

The AIA can be claimed by an individual, partnership or company carrying on a trade, profession or vocation, a UK non-residential property business or a furnished holiday let. Only partnerships or trusts with a mixture of individuals and companies in the business structure are unable to qualify for AIA.

The AIA was permanently set at £200,000 for all qualifying expenditure on or after 1 January 2016. However, this limit has been temporarily increased to £1 million for a 2-year period from 1 January 2019 to 31 December 2020. This increased limit is a generous allowance and should cover the annual spend of most small and medium sized businesses. 

The AIA does not apply to purchases of cars.

If you are thinking of incurring large items of capital expenditure for your business over the coming months, you should ensure that any purchase is properly timed to take full advantage of the temporary increase in the AIA limit.

Source: HM Revenue & Customs | 11-09-2019

Back

Post a Comment

Your email address will not be published. Required fields are marked *

*

  • ABOUT US

    the accountancy practice kent logo

    The Accountancy Practice is a Kent based firm specialising in small and medium sized businesses. We provide a friendly, professional service and regard our smallest client as important as our largest.
  • Latest News

    12-09-2019
    New checker tool to help businesses prepare for Brexit

    The government has ... read more

    12-09-2019
    Immigration rights of EEA citizens in the event of a no-deal Brexit

    The Government has ... read more

    11-09-2019
    Information Commissioner’s Office publishes no-deal Brexit guidance for small and medium-sized organisations

    The Information ... read more

    More news

  • CONTACT US

    The Accountancy Practice
    10 Churchill Square
    Kings Hill
    West Malling
    Kent ME 19 4YU

    01732 897929

    Fax: 01732 897939
    info@theaccountancypracticeltd.co.uk


    Facebook
    Twitter
    Linkedin
  • Why choose us

    By working more closely with you than traditional accountants, The Accountancy Practice is able to gain a deeper understanding of your individual business needs. We are then on hand to support you with day to day issues and provide ongoing financial and taxation expertise. You can think of us as your virtual Financial Director.