Annual investment allowance

The new £50 000 ‘first year allowance’ (all right I know that’s not what it is called) will be pro-rated for short or long accounting periods – but long accounting periods (for tax purposes) only exist for the unincorporated. The following scenario seems inequitable and perhaps the profession should be doing some lobbying.

A new company incorporated on (say) 15 June 2008 commences trading immediately. It has not chosen another accounting year so its default accounting date as set by Companies House will be 30 June and the first accounts will be drawn up for the accounting ‘year’ (12½ months) to 30 June 2009.

The directors enjoy a successful first year and decide to buy new plant costing £50 000 for delivery on 25 June 2009. By my reckoning by accident of the incorporation date and the default mechanism at Companies House...