January 2016


What is the Annual Investment Allowance? (Part 2)

Posted on November 26th, by Helen in business advice, Small business tax. Comments Off

The Annual Investment Allowance enables a business to reduce its tax bill by claiming for the cost of capital equipment in the year it bought the equipment. Up until December 2015 the maximum Annual Investment Allowance is £500,000. But from January 2016 this amount drops to £200,000.

This might seem very straight forward but in fact it is slightly more complicated than that. For a business with an accounting year that is partly in 2015 and partly in 2016 the amount that can be claimed is a proportion of each limit. There are transitional rules that affect how much can be claimed and it all depends on the timing of your purchase. So if you buy a number of pieces of equipment for fairly low costs this may not be a problem. Alternatively you may buy one large piece of machinery … Read More »