Plant and machinery allowances ― the annual investment allowance

By Tolley

The following Corporation Tax guidance note by Tolley provides comprehensive and up to date tax information covering:

  • Plant and machinery allowances ― the annual investment allowance
  • Amount of the allowance
  • Short accounting periods
  • Timing of expenditure and fluctuating rates of AIA
  • Exceeding the rates of AIA
  • Restrictions and exclusions
  • AIA and the special rate pool
  • The transitional rules

This guidance note is written from the perspective of companies only. For information on the AIA as available to unincorporated businesses, see the Annual investment allowance (AIA) guidance note within the Owner Managed Businesses module (subscription sensitive).

Amount of the allowance

An ‘annual investment allowance’ (AIA) is available for expenditure incurred on plant or machinery on or after 1 April 2008. The maximum amount of AIA available has varied significantly over recent years and the relevant amounts are as follows:

Maximum annual allowancePeriod qualifying expenditure incurred
£200,000From 1 January 2021
£1,000,0001 January 2019 until 31 December 2020
£200,0001 January 2016 until 31 December 2018
£500,0001 April 2014 for companies until 31 December 2015
£250,0001 January 2013 until 31

More on Capital allowances: