Annual investment allowance – end of the second straddling period

In his Autumn Budget in October 2021 Rishi Sunak (then chancellor of the exchequer) announced that the temporary increase in the annual investment allowance (AIA) to £1m would be extended to 31 March 2023. That built on his previous extension until 31 December 2021 of what Philip Hammond had announced back in October 2018 as a temporarily increased AIA for just the two calendar years from 1 January 2019 to 31 December 2020. By the time we reach 31 March 2023 the £1m will have been in place for more than four years.

Effect of extensions

The immediate practical effect of these successive extensions in duration of the increased AIA limit has been to simplify the calculation of the maximum AIA available in any chargeable period which began before but ended after what would otherwise have been the end dates of the increase – first 31 December 2020 and...