One of the centrepieces of a Budget speech designed to support business investment was George Osborne’s announcement that the annual investment allowance would be doubled from the current £250,000 to £500,000 until the end of 2015.
In spite of protests about the complexity of continually tinkering with the AIA, the Chancellor clearly perceived last year’s temporary increase from £25,000 to £250,000 as a crowd-pleaser. Maintaining the same rate and extending it for longer would have been simpler for all concerned, but he opted instead to go for another temporary increase to £500,000 until 31 December 2015.
According to the government, 99.8% of businesses will now receive 100% up-front relief on investments in plant and machinery - but not cars. Accelerating the relief up to £500,000 will encourage small and medium-sized businesses to increase or bring forward their capital investment in plant and machinery. Three-quarters of recipients are located outside London and the South East and “it will particularly help the agriculture and manufacturing sectors,” HMRC said.
Perhaps conscious of the friction caused by the changing rates, HMRC...
About John Stokdyk
AccountingWEB’s Head of Insight has been with the site since 1999 and likes to spend his time studying accountants’ technology habits. When not nerding out, you can find him exploring obscure indie music and searching for the perfect organic sourdough loaf from his base in Brighton, UK.