Increase in the Annual Investment Allowance

The Annual Investment Allowance (AIA) is being increased from 1 January 2019 to £1m from the present base level set some years ago of £200,000. The increase is due to be available for two years, until 31 December 2020. At this later date, the AIA will presumably return to the £200,000 limit.

The AIA is a 100% write down of qualifying asset purchases against business profits. For profitable companies, partnerships (excluding partnerships where one of the partners is a company or another partnership) and sole traders this is a generous tax break.

The AIA is available for most plant and equipment purchases, for example:

  • items that you keep using in your business, including commercial vehicles and cars if they are working assets, for example taxi cabs or driving school, dual control vehicles;
  • costs of demolishing plant and machinery;
  • parts of a building considered integral, known as ‘integral features’;
  • some fixtures e.g. fitted kitchens or bathroom suites;
  • alterations to a building to install other plant and machinery - this doesn’t include repairs.

The AIA is not available for purchase of:

  • cars that are not working assets;
  • items you owned for another reason before you started using them in your business; and
  • items given to you or your business.

Please call if you would like more information about this generous tax allowance.

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Jerroms is a trading style of both Jerroms Business Solutions Limited (Co ref no as already shown) and Jerroms (Bromsgrove) Limited (company ref no as already shown). Registered office for each of these companies is: The Exchange, Haslucks Green Road, Shirley, Solihull, West Midlands, B90 2EL.

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