logo
MENU

Capital Allowances

Date:
Category:Latest News

Annual Investment Allowance

The Annual Investment Allowance (AIA) allows businesses to deduct qualifying expenditure up to the available limit when calculating profits, providing immediate tax relief for the expenditure. The AIA is available to unincorporated businesses and to companies.

The temporary limit of £1 million, which has applied since 1 January 2019, comes to an end on 31 March 2023. From 1 April 2023, it is due to revert to its permanent level of £200,000. Transitional rules apply where an accounting period spans 31 March 2023, and these can operate harshly.

If you are planning significant capital expenditure, please talk to us to ensure you don’t fall foul of the transitional rules.

Super-deduction

Companies (not non-Ltd businesses) can claim a super-deduction for most expenditure that qualifies for main rate capital allowances where that expenditure is incurred between 1 April 2021 and 31 March 2023. The main exclusion is expenditure on cars. The super-deduction provides an enhanced deduction of 130% of the expenditure.

If you run your business as a company, time is limited to take advantage of the super-deduction (which provides a better rate of relief than the AIA).

We can help you plan your capital expenditure to make best use of the available reliefs.

50% first-year allowance

Again, companies only can also benefit from a 50% first-year allowance for qualifying expenditure incurred in the period from 1 April 2021 to 31 March 2023 which would otherwise qualify for special rate writing down allowances of 6%.

The allowance is only beneficial where the AIA limit has been used up.

Related news

The Employment Allowance (EA) is an annual offset against your Employer’s National Insurance (NI) cost that you pay on top of your staff’s wages. From the 2025-26 tax year, the EA will be increasing to £10,500 per year (up from the current £5,000) which covers the Employer’s NI cost of 4 employees working 35 hour […]

View article

The company car fuel rates are reviewed and adjusted each quarter on:

1 March
1 June
1 September
1 December

View article
ICAEW-chartered-accountantsACCA-platinumACCA-practisingHandpickedsage-logoxero-logoquickbooks-logofreeagent-bronze-partner-badge 2023-RGB

We use cookies to ensure you get the best experience on our website. Read more in our privacy policy.