The Annual Investment Allowance (AIA) was temporarily increased from £200,000 to £1,000,000 from 01 January 2019 for a period of two years. As of 01 January 2021 the allowance was due to revert back to £200,000 going forward.
We outlined in our blog last week why careful consideration should be given to the timing of asset purchases to maximise the relief available in accounting periods which the change impacted.
The government have announced the temporary increase to £1,000,000 will now be extended until 31 December 2021.
This therefore gives businesses an additional year to utilise the higher level of allowances available.
Given the extension is only for one year, it is still advisable to plan asset purchases with appropriate consideration given to the impact of the change.
For further advice on AIA, or any aspects of capital allowances, please contact us via e-mail on email@example.com or phone 01324 441250.