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ANNUAL INVESTMENT ALLOWANCE EXTENDED

We are delighted that the Treasury has confirmed a temporary increase to the annual investment allowance which has been extended until 1 January 2022.

Afford Bond Director, Paul Edwards explained: "The allowance allows firms to fully offset the cost of qualifying capital items of plant and machinery against taxable profits. Since 1 January 2019, businesses have received faster tax relief for plant and machinery investments up to £1 million. However, after 2 years, the measure was due to close on 31 December 2020 and revert back down to £200,000 from 1 January 2021. This has now changed."

Financial Secretary Jesse Norman said: "It is vital that we support business through the difficult months ahead. Extending the annual investment allowance's £1m cap will give businesses the confidence they need to invest into next year."

The Association of Tax Technicians, added: "The extension will be very welcome for businesses with higher levels of qualifying capital expenditure. However, for many businesses whose relevant annual expenditure is no more than £200,000, it will simply delay an unwelcome complication. The Government should consider amending the legislation, so the allowance does not produce counter-intuitive results for businesses with lower levels of expenditure."

If you need expert tax advice or guidance please contact us using the form here on our website or phone Nantwich Accountants T: 01270 623731 or Wilmslow Accountants T: 01625 416380.