The TACS Partnership looks at annual investment allowances, outlining what they are, why you should look out for them and why there’s a twist in the change of limits.
Capital allowances are a well-established tax relief, which enable taxpayers to claim tax deductions for capital expenditure on assets purchased for use in their businesses or trades.
The annual investment allowance (AIA) provides an important enhancement to these rules, which enables taxpayers to recover the cost, not on a reducing balance basis over time, but instead in full (subject to a ceiling) in the year of purchase.
The story so far…
AIAs were first introduced in Finance Act 2008; the legislation was incorporated into the Capital Allowances Act 2001. AIAs are designed to give 100% tax relief for qualifying expenditure on plant and machinery in the period of,
