Upcoming Changes to the Annual Investment Allowance (AIA)

Posted on 2nd December 2015 by Streets What's trending?

Image to represent Upcoming Changes to the Annual Investment Allowance (AIA)

For businesses with accounting periods straddling 31 December 2015 planning on significant investment in plant & machinery, the AIA is reducing from £500,000 to £200,000 from 1 January 2016. Therefore it is important to consider investing in plant & machinery before 1 January 2016 to maximise allowances.

For accounting periods that straddle 1 January 2016, the allowance will be pro-rated and restrictions will apply to expenditure falling after 1 January 2016 so it is important to consider the timing of expenditure.

For an accounting period ending on 31 March 2016 the maximum AIA will be £425,000, being 9/12 x £500,000 = £375,000 plus 3/12 x £200,000 = £50,000.

For expenditure incurred post 1 January 2016 the maximum AIA available will be £50,000 whereas the full £425,000 will be available for expenditure incurred before 1 January 2016.

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