The measure
Businesses are currently able to offset the first £250,000 of investment in plant or machinery each year against their taxable profits. This limit is to be temporarily increased to £500,000 before falling back to £25,000.
Who will be affected?
All businesses investing in plant and machinery.
When?
For expenditure incurred between 1 April 2014 and 31 December 2015 for corporation tax purposes and 6 April 2014 and 31 December 2015 for income tax purposes after which the limit will fall to £25,000.
Our view
Whilst the temporary increase in the AIA limit will help all businesses spending in excess of £250,000 on plant and machinery, the most dramatic positive effect will be for many small and medium sized businesses which will be able to offset much or even all of their investment in plant or machinery in the first year
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
