Tax Relief on Plant & Machinery

I have been reading the outcome of the Autumn Statement and I am aware that the Annual Investment Allowance is being increased to £250,000 from January 2013. Does that mean that I can spend £250,000 on plant and machinery in January and receive tax relief on the whole amount? p

15th January 2013

No, not necessarily. There are some things you should be aware of.

Firstly, clearly the equipment you purchase must be eligible for the Annual Investment Allowance (AIA). I would always encourage business owners to discuss their plans with an accountant first; before going ahead and making any significant purchases. This way, you should ensure that you are fully aware of the tax relief available and there’ll be no nasty surprises.

But secondly, and more importantly, the AIA available will depend on your year end and the timing of your purchases. The AIA has changed three times recently:

  1. £100,000 up to and including 5th April 2012 (unincorporated business)/ 31st March 2012 (companies)
  2. £25,000 up to and including 31st December 2012 (irrespective of entity type)
  3. £250,000 from 1st January 2013 (irrespective of entity type)

Because there have been so many changes and because of the rules surrounding AIA, I would strongly recommend that you discuss your plans with your local TaxAssist Accountant, to ensure that you get as much tax relief as possible; as quickly as possible.

By Jo Nockels

Disclaimer: The information provided is based on current guidance (at date of publication) from HMRC and may be subject to change. Any advice shared here is intended to inform rather than advise. Taxpayer's circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this information, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.

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