Extend the £1m annual investment allowance until December 2021

The temporary increase in the annual investment allowance (AIA) should be extended beyond its scheduled end date of 31 December 2020 to help recovering businesses says the Association of Taxation Technicians.

The allowance which allows businesses to offset the cost of qualifying capital items of plant and machinery against taxable profits was set at annual expenditure of £200 000 but that limit was increased temporarily to £1m for the two calendar years 2019 and 2020 in the 2018 autumn Budget.

Jeremy Coker ATT president said: ‘Covid-19 means that 2020 has been a year like no other and for businesses the uncertainties mean that few have been in a position to make use of the increased AIA in the way that they might otherwise have done. We very much hope that the Chancellor is planning to announce an extension of the temporary £1m limit...