Many businesses are still unaware that they could be claiming tax relief on up to £250,000 worth of asset expenditure and are missing out on an easy way of reducing their tax bills, warns Julia Whelan, tax partner at Curo Chartered Accountants.
The Annual Investment Allowance (AIA) was increased to £250,000 with effect from 1 January 2013 and will reduce back down to £25,000 from 1 January 2015. Most assets qualify for AIA which typically includes plant and machinery purchased for use in the business.
Says Julia, “It is important that businesses are reminded of the relatively generous levels of tax relief available under the AIA and take advantage of it wherever possible; we are urging clients to consider the timing of their asset expenditure and bring it forward where possible to qualify for the higher tax relief before it reduces tenfold.”
The AIA relief is restricted if the business’ year end straddles either of the start or end dates of the enhanced relief.
Julia concludes: “The message is simple; this higher tax relief is not here to stay, so use it or lose it!”.