Annual Investment Allowance Extension

Following our recent article and pressure from industry bodies, the Government have announced plans to extend the Annual Investment Allowance (AIA) for 12 months.

Previously this tax relief was due to drop from £1 million per year to just £200,000 on 1 January 2021. The new announcement indicates that this will not happen until at least 1 January 2022.

The AIA offers 100% tax relief on purchase of qualifying plant and machinery or integral features subject to the annual limits.

Effective from 1 January 2019, the annual limit was temporarily increased to £1million and this should now continue until 1 January 2022.

For a business operating a 31 March 2021 year end, potentially the full £1 million should be available rather than having to worry about applying complex split period rules.

Here to help

If you would like any further information, please do not hesitate to contact one of the team.