In our July update we advised businesses to take care when timing their capital expenditure during 2012. You may remember that the Annual Investment Allowance is being reduced from £100,000 per annum to only £25,000 per annum. The effective date of the change is 6 April 2012 for unincorporated businesses and from 1 April 2012 for companies.
In order to avoid complications if your year end is different from the end of the tax year (31 March 2012 or 5 April 2012) you should make your investment during the trading year that ends in the fiscal year 2011-12. For example if your year end is December you should invest before 31 December 2011.
The types of assets that are covered by the AIA relief include:
- Tools and equipment
- Computers
- Office equipment and furniture
- Computerised machinery
- Vans for business purposes
- Capital expenditure on computer software
Integral features of a building, such as electrical systems
Items which do not qualify as plant and machinery for AIA include:
- Cars
- Walls, floors, doors, windows and stairs
If you would like any further advise or guidance please do give us a call.
Sue Stephens
Tax Manager
