The annual investment allowance (AIA) is a great help to businesses. The basics are that you get a 100% allowance on any qualifying capital equipment purchases when calculating your taxable profits.
At the present the allowance is £500,000. This is due to drop significantly to £25,000 from 31 December 2015.
Due to this change it is important for businesses to look at their capital purchases now to make them as tax efficient as possible. Timing is Key.
There are various transitional rules if your financial year spans the December 15 period which can be quite complicated and can catch you out. Expenditure you may think will qualify for AIA may end up not being allowed under the AIA.
If you need any advice regarding this please do not hesitate to contact Alex Walls at our office.