The Annual Investment Allowance (AIA) allows businesses to offset the cost of eligible plant and machinery purchases to reduce taxable profits. Currently the annual limit is £1 million, but it will be reducing to £200,000 from 1 April 2023.
This change may prove significant for some business owners, especially if their accounting period for claiming the tax relief straddles this changeover date, because it will reduce the amount of AIA they can claim for the year. Businesses with a 5 April year-end should take extra care to avoid being treated as having incurred qualifying expenditure in any of the five days at the beginning of April 2023. (more…)