From next week the annual investment allowance (AIA) will reduce to £25,000 per annum for all businesses incurring expenditure on plant or machinery.
The measure will have effect from 1 April for businesses liable to pay corporation tax, and 6 April 2012 for businesses within the charge to income tax.
This means, as per Rebecca Benneyworth’s explanation in the Sage Budget Analysis Report, that the requirement to deal with capital allowances will be removed - indeed for most of the affected businesses the AIA of £25,000 would cover all of their capital expenditure.
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Business and finance journalist