Annual Investment Allowance Limit Extension

The Annual Investment Allowance (AIA) gives businesses the opportunity to claim 100% capital allowances in the year of expenditure on qualifying capital assets.

£1 million annual investment allowance extended to 31 March 2023

From 1 January 2019 the 100% AIA amount for expenditure on plant and machinery and integral features was temporarily increased from £200,000 to £1 million with the measure due to be reversed from 1 January 2021. Since then, the reversal date has been pushed back a couple of times, most recently in the Autumn budget on 27 October 2021. The government have now announced that the expiry date for the £1 million annual allowance will be extended to 31 March 2023.

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This measure has been put in place to stimulate business investment in UK manufacturing and give upfront support to businesses during continuing COVID-related uncertainty. Despite the measure being primarily aimed at the manufacturing sector, it is welcome news for businesses in all sectors that are looking to invest in plant and machinery.

By extending the limit, businesses can plan their capital expenditure over the next 18 months to maximise the 100% tax relief available for qualifying expenditure. Planning will also need to be considered for periods straddling the 31 March 2023. The reduction to £200,000 means that businesses will have an apportioned AIA limit for expenditure made post 31 March 2023, so expenditure should be made before this date where possible.

If you are expecting to incur expenditure on plant and machinery or are carrying out any refurbishment/fit out works, Please complete the below form so that we can help you maximise your claim:

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