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SMEs Unaware Of Increased Annual Investment Allowance

Now's the time to consider some plant and equipment purchases ...

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POSTED BY HELEN BEAUMONT ON 14/08/2019 @ 8:00AM

Did you know that at least 50% of SMEs are unaware of changes to the Annual Investment Allowance?

Thanks to the increased Annual Investment Allowance, now's the time to consider some plant and equipment purchases!

Thanks to the increased Annual Investment Allowance, now's the time to consider some plant and equipment purchases!

photo by tianyi ma on unsplash

Some new research by a leading asset finance company found that 58% were unaware that the Government has increased the Annual Investment Allowance (AIA); just 13% were planning to increase investment in 2019 as a result of these changes.

"This is a shocking statistic and shows that generally, SMEs are not getting good tax advice!"

The AIA changes were introduced after the 2018 budget. The Chancellor announced an increase in tax relief for investment in plant and machinery from £200,000 to a massive £1,000,000. The Anual Investment Allowance gives businesses the opportunity to write off 100% of qualifying capital expenditure against taxable profits declared in the same period.

AIA applies to most asset purchases, including machinery, tools, transport, earthmoving gear, office equipment, fixtures, fittings and technology. It has a massive scope and is well worth looking into!

As an aside, it is also a useful consideration when purchasing a commercial property that needs fitting out or a residential property that you intend to rent out as a furnished holiday let. Don't overlook these opportunities!

The AIA increase is only for a two year period and applies for expenditure incurred on or after 1st January 2019, for the next two years. If you're going on a capital spending spree, then do it sooner rather than later. Be careful if your accounting year-end is not the 31st December though, or else you will need to pro-rata your calculations.

"Would you like to know more?"

If you'd like to find out more about the Annual Investment Allowance and how your business can benefit from the increased allowance, do give me a call on 01908 774323 or click here to ping me an email and let's see how I can help you.

Until next time ...



HELEN BEAUMONT

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More about Helen Beaumont ...

Helen brings the personal tax planning experience of the top 20 tax companies to Essendon. Formerly of MacIntyre Hudson (with 45 offices nationwide), Helen worked at Chancery for more than 10 years before joining Essendon as the personal tax specialist.

Tax Planning can make a considerable difference to your tax liability. Helen has specialist knowledge and experience in tax planning and uses every opportunity to minimise your tax bill is utilised. By analysing your investments, income, profit and expenditures, Helen will provide strategic tax planning expertise that could offer significant savings, whilst delivering clear, honest advice and guidance.

When Helen is not at Essendon she spends time with her young son and likes going on long walks with the family dog.