Capital allowances

Capital allowances

Annual Investment Allowance (AIA)

This allowance gives 100% write off on most expenditure on plant and machinery of up to £200,000 per annum from 1 January 2016. If the cost is greater, further tax relief comes via a ‘writing down’ allowance of 8% or 18% depending on the type of asset.

There is also a 100% allowance, sometimes called an ‘enhanced capital allowance,’ on some energy efficient plant and low emission cars.

AIA does not apply to cars, which are treated differently.

Tip

The timing of tax relief can maintain positive cash flow, so please contact us for further advice when planning plant and machinery purchases.

Motor cars

Tax relief here depends increasingly on CO2 emissions, and sometimes date of purchase. Don’t forget to factor in road tax cost in the year of purchase. We can help with the small print, so please get in touch.