AIA to be scaled down?
Wednesday, 30 September 2020
In advance of the Autumn Budget, the Association of Taxation Technicians (ATT) and many businesses called upon the Chancellor to extend the availability of the temporary increase in the Annual Investment Allowance (AIA) beyond its scheduled end date of 31 December 2020 in order to help recovering businesses.
Given that the Autumn Budget has been cancelled, it seems that this generous allowance will be scaled back down to its previous level of just £200,000 from the end of the year.
For an example of how AIA relief works if your business’s year end does not align with the calendar, see my previous AIA blog.
In the present climate, many businesses need to diversify and invest to ensure future survival. Making sure this is done before the December 2020 reduction in AIA relief could be vital to future success and cashflow. Bank loans and other financing sources are in short supply so achieving 100% tax relief on your spend could, in part, be a silver lining which shouldn’t be ignored.
If you have any questions about AIA, please get in touch with your usual contact at Larking Gowen. You can find contact details on the Our People section of the Larking Gowen website. Alternatively, call 0330 024 0888 or email email@example.com.