£1million Annual Investment Allowance (AIA) to be extended
The Treasury has recently announced that the £1million cap on Annual Investment Allowance claims is to be extended until 1 January 2022. As set out in our Autumn Newsletter, the cap was due to drop to £200,000 from 1 January 2021.
Businesses can therefore continue to benefit from 100% tax relief for qualifying expenditure, such as tractors, in the year on purchases of up to £1million, instead of £200,000. The same amount of relief, in the form of writing down allowances, is still available on any qualifying expenditure in excess of the AIA limit, but is spread over several years.
This move is intended to give businesses the boost they need to weather the pandemic and plan for the future. It is hoped that the extension will provide businesses with confidence to invest into next year, helping them to grow whilst also benefitting the wider economy.
This is an important point to consider if you are planning any major capital expenditure in the near future. If you would like any further advice then please do not hesitate to contact us.
Louise Heywood ACCA
Lou has worked with Margaret since 2006 and is a qualified Chartered Certified Accountant. Lou has an agricultural based portfolio and enjoys assisting farmers in all aspects of accountancy and taxation. She can be reached in the office on a Monday, Tuesday or Thursday.
Lou has a very happy (most of the time!) and energetic two year old daughter, who takes up the majority of her free time. They both enjoy going back Lou's parents dairy farm and helping out when they can, with her daughter also showing a passion for farming.