Tim Palmer looks at the annual investment allowance for capital allowances purposes, forthcoming changes and how much can be claimed.
Finance Act 2008 included various measures which were aimed at simplifying the tax position for smaller businesses by giving them, in many cases, an immediate write-off for capital expenditure.
An annual investment allowance (AIA) was introduced, allowing the business to claim 100% capital allowances on certain qualifying plant and machinery expenditure for each appropriate annual accounting period. Since its inception, the annual amount of expenditure which can be claimed under the AIA has been changed on several occasions.
It should be noted that this allowance is available, in certain circumstances, to an individual and partnerships (provided the partners are individuals), as well as companies. However, companies are only entitled to one AIA, irrespective of how many qualifying
