AIA (Annual Investment Allowance)
Autumn Statement December 2012 update – click on the link for our full report. The annual investment allowance (AIA) is a relief for businesses which invest in plant and machinery. Instead of claiming a tax deduction for accounting depreciation, businesses can claim writing down allowances at only 18% (or 8% for some assests). The AIA is an amount that can be spent in a year on which 100% of the cost can be claimed immediately, reducing current tax charges and providing a significant cash incentive to invest in new equipment.
Until 31st December, the maximum annual allowance was set at £25,000 but from 1st January 2013 the 100% allowance will be available on expenditure of £250,000 a year for two years from that date.
There are complex rules around a change of rate which can produce surprising results – for example, a business with a year-end of 31 March 2013 will only be able to use 3/12 of the increased limit by that date. Businesses will be encouraged to invest, but it will be important to check the numbers first – talk to your accountant at Riverview Portfolio.
Overview of Taxation
Taxes in the UK are collected by Her Majesty’s Revenue and Customs HMRC on behalf of the government. New tax rules are made or amended by Acts of Parliament, especially the Finance Acts, by case law and by HMRC’s internal policy reviews, usually following tribunal or court cases.
Almost every aspect of business and personal life is covered in the tax rules of the UK. Some of these taxes are direct, such as PAYE and some are indirect, an example being fuel duty. Some are aimed primarily at individuals, like inheritance tax; some at companies, say, corporation tax; and many, like VAT, affect both individuals and businesses.
In many instances there are allowances and reliefs that can be used to minimize the tax due.
Whether you are an individual in employment, self-employed or running a business, we can check that the tax you or your business is paying is no more than it needs to be.
Follow this link to the latest tax rates and tables.