Annual Investment Allowance: £1m Cap Extended For A Year

The Annual Investment Allowance (AIA), which stimulates investment in UK Manufacturing is to be extended for another year. The Treasury has confirmed this is to help reverse the economic downturn ...

Many businesses, which include manufacturing firms, can claim up to £1 million in same-year tax relief via the AIA for any capital investments they make in plant and machinery, until the 1st January 2022.

"The AIA extension was supposed to revert to £200,000 on the 1st January 2021!"

This is a very positive move from the Treasury and is vital in supporting businesses through the difficult start most will face in 2021. The extension to the AIA cap will give businesses more confidence when considering investments in the next 12-months.

Seen by many as a yo-yo allowance, with increases and reductions happening regularly, each change is designed to accelerate investments into United Kingdom businesses.

I believe today's announcement will ensure more investments will qualify, and those delayed by the pandemic can still go ahead in the new year. It's going to be very useful for manufacturers where business confidence is returning thanks to the recent vaccine announcements.

"Have you been in survival mode in 2020?"

If your business has been in survival mode during the pandemic, be confident that any plant and machinery assets you want to invest in next year will be covered by the Annual Investment Allowance extension to the £1 million cap.

If you feel inspired to find out more about anything I've said here, do call me on 01908 774320 or leave a comment below and I'll be in touch as soon as I can.