For the majority of small and medium sized businesses, tax relief on the costs of buying plant and machinery is obtained through the Annual Investment Allowance.   Plant and machinery includes a variety of capital expenditure, including computer equipment, office equipment, commercial vehicles and shop floor plant and machinery.

Where assets are acquired under contract hire or leasing, tax relief is received in the periods when payments are made.

Annual Investment Allowance (AIA)

The AIA replaced most other forms of tax relief on plant and machinery in April 2008. Since that date, 100% tax relief has been given on annual expenditure on plant and machinery up to the prescribed level.

The annual expenditure levels allowed for AIA have fluctuated widely and have been as low as £25,000 per year and as high as £1,000,000 per year.

Action plan

For further assistance in this matter, or any other issues relating to capital allowances please phone Shacklefords Chartered Accountants on 0121 448 7466 or e mail info@shacklefords.co.uk