Why now is the time to spend (with caution!) on Plant and Equipment...

The Chancellor George Osborne announced in his Autumn Statement on 5th December 2012 that the annual investment allowance (AIA) would be increased to £250,000 from 1st January 2013 for 2 years. This means that businesses investing in qualifying equipment will get the first £250,000 of expenditure in that year as a tax deduction.

This is fantastic news for many businesses which have been holding back on investing in equipment with the reduced allowances currently available. However, there are complex transitional rules which apply to accounting periods which straddle either 31st March 2012 or 1st January 2013. For example a business with a 28th February 2013 year end would only be entitled to £68,750 of AIA for that year, with added restrictions in relation to expenditure in certain periods.

If you are planning on investing in equipment in the New Year, we suggest you check with Mitchell Charlesworth's tax experts or your normal engagement contact to see how these rules affect you and ensure that you maximise your claim.

Post a comment

Registered to carry on audit work in the UK and Ireland by the Institute of Chartered Accountants in England and Wales and authorised and regulated by the Financial Conduct Authority for investment business