03 Aug Time is running out on £1 Million Annual Investment Allowance
*Please note this guidance has now changed in the September 2022 mini-budget, for more information click here*
From April 2023 the Annual Investment Allowance (AIA) will be reduced from £1 million to £200,000. The AIA amount was temporarily increased to £1 million between 1 January 2019 and 31 March 2023.
What is Annual Investment Allowance?
Annual Investment Allowance is a form of tax relief which allows businesses to deduct the full value of a qualifying item up to a certain limit from profits before tax.
What are the criteria to claim AIA?
Annual Investment Allowance can be claimed on most plant and machinery up to the AIA amount. AIA can be claimed on second-hand items, whereas to claim Super Deduction tax relief items must be brand new.
Who will be affected by the change in the Annual Investment Allowance amount?
This change will affect all clients who purchase plant and machinery of significant value, in particular rural and farming clients who are buying expensive farm machinery and assets.
To take advantage of the current £1 million allowance clients must have bought, paid for, and received the item before the end of March 2023.
If you are planning to buy a plant or machinery item soon, we advise that you act now to take advantage of the increased allowance before the significant reduction in April 2023.
For more information about Annual Investment Allowances and to find out if you can claim, contact our team of specialist tax advisors by emailing firstname.lastname@example.org.