An unsurprising but welcome announcement from HM Treasury with the AIA (Annual Investment Allowance) set to continue at £1,000,000 until January 2022.
Good news for businesses that had to either postpone or reduce their capex investment through 2020 with this extension providing a further 12 months to benefit from the temporary cap increase.
Sounds great but remind me, what is the AIA again?
The Annual Investment Allowance lets businesses deduct the cost of certain assets from their taxable profits.
This means, in theory, that companies can deduct up to £1,000,000 from their taxable profits, saving a substantial amount of money so long as the money has been in invested in qualifying expenditure.
AIA can be claimed on most assets purchased for business use and also applies to acquisitions funded through hire purchase, although not lease-based assets.
OK, where can I find further info?
Please see our original post here for a full run through of the Annual Investment Allowance including details on who can claim and qualifying assets.
Alternatively, get in touch with the team at KeySME or pickup with your company accountant to see how the AIA can work for your business.
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