
Summer Budget 2015: A 500-word summary for the UK business community
The AIA was introduced in 2008 to help small firms increase productivity and scale with large investments by enabling them to claim 100 per cent tax relief on equipment and machinery – up to the limit set for the year of expenditure.
Originally launched at £50,000, the allowance has yo-yoed from £100,000 to £250,000 to £25,000 to £500,000. As such, it was believed that the limit would plummet back to £25,000 in 2016, but the chancellor revealed during the Summer Budget that’s not going to be the case. “Many small and medium sized businesses have benefitted from our enhanced Annual Investment Allowance. This Allowance was set at £100,000 when we came to office – it is higher now, but without action it will fall to just £25,000 at the end of the year. That would especially hit middle-sized companies in areas like manufacturing and agriculture that we want to do more to build up in Britain,” said Osborne. “So I can confirm that the Annual Investment Allowance will not fall to £25,000 but be set at £200,000; this year and every year. A major, permanent boost to the incentives for long-term investment by small and medium sized firms in Britain.”- George Osborne says tax dodgers have “nowhere to hide”
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However, Mark Tighe, the MD of capital allowances firm Catax Solutions, isn’t so pleased about the pledge and claimed Osborne has “fallen short in his promises to support SMEs”.
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