Annual Investment Allowance (one more time, for thickos like me)

[MugsGame]

I just read about the changes to Annual Investment Allowance:

http://www.bytestart.co.uk/content/t...proposal.shtml

So I read that as meaning that I can buy 'plant' - such as a new server or company laptop, and claim tax relief for the cost against corporation tax?

How would my accountant account for this properly? What would I need to tell them?

I don't know a whole lot about tax terminology so if someone can explain the benefits of AIA in layman's terms, I would be grateful.

[Nixon Williams]

The new Annual Investment Allowance (AIA) is for expenditure on capital for upto £50,000 per annum.

If your business qualifies (most small companies will) you can claim 100% relief in the first year. The old rules for small companies was that you would claim 50% in year 1, and then 25% per annum thereafter.

The new rules basically accelerate the tax relief, so you get it all in year 1 rather than wait a few years.

So the tax advantage is no greater other than you get it faster!

If you supply your accountant with copies of your paperwork then they should deal with this accordingly.

I hope this has answered your question.

Alan

[MugsGame]

Thanks for the reply.

Just to clarify, does this just apply to new businesses, or all businesses?

I've read conflicting things from different places.