Annual investment allowance (AIA)

By Tolley
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The following Owner-Managed Businesses guidance note by Tolley provides comprehensive and up to date tax information covering:

  • Annual investment allowance (AIA)
  • The annual investment allowance
  • Transitional rules

The annual investment allowance

The AIA gives a 100% first year allowance for investment in plant and machinery (excluding cars). It is intended to encourage greater levels of investment by reducing the costs of capital.

CAA 2001, s 38A

The maximum amount of relief available is based on an annual expenditure limit. The amount of this limit has fluctuated in recent years as shown in the following table:

Maximum annual allowance (£)Period qualifying expenditure incurred
1,000,000On or after 1 January 2019
200,0001 January 2016 until 31 December 2018
500,0006 April 2014 (1 April 2014 for companies) until 31 December 2015
250,0001 January 2013 until 5 April 2014 (31 March 2014 for companies)
25,0006 April 2012 (1 April 2012 for companies) until 31 December 2012

More on Capital allowances: