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KEVIN READ looks at how companies should prepare for the forthcoming reduction in the annual investment allowance
KEY POINTS
- Reduced annual investment allowance from April 2012.
- Maximising claims over the transitional period.
- Benefit of hire purchase arrangements.
- Obligation to pay.
- Leasing rather than purchasing.
In George Osborne’s first Budget in June 2010 he announced that capital allowances would be reduced from April 2012 effected by both a reduction in the writing-down allowances (WDAs) available on the general and special rate pools and secondly a reduction from £100 000 to £25 000 a year in the annual investment allowance (AIA) which gives 100% relief upfront for qualifying plant and machinery.
The Chancellor said 95% of businesses would still have all their expenditure covered by the reduced AIA. However that still leaves many businesses adversely affected by...
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