Significant changes to finance for business use could arise in April 2012, following changes to the Annual Investment Allowance (AIA), part of the Capital Allowances Act 2001.
As part of the Finance Bill 2011, the total cap on the AIA for businesses per financial year is being lowered from £100,000 to just £25,000.
That means any additional finance for business assets or machinery spent in the same year will not qualify for tax relief in the same way.
Companies within the charge to corporation tax face this change on April 1st 2012, while those within the charge to income tax – including limited liability partnerships and unincorporated businesses – see their allowance fall on April 6th.
So what can you do to make the most of your AIA in the last months of the 2011-12 financial year?
The obvious answer is to arrange finance for business investments in time for the April deadlines.
If you can get everything in place to make your purchase before the cut-off point, you can count it towards your 2011-12 AIA.
With turbulent economic conditions keeping business investments down over the past 12 months, you may realise you have more of your 2011-12 allowance remaining than you will have at your disposal for the whole of 2012-13.
Contact an advisor to learn more about how your company’s tax exposure could be affected, and to learn more about how to bring forward your remaining investments to maximise your real-terms AIA.
