“What on earth is an AIA?”, I hear you ask!
AIA stands for Annual Investment Allowance and is effectively a 100% tax allowance for business expenditure on almost all plant or machinery, excluding cars – but including IT equipment. It is capped at £100,000 a year.
So, cash flow permitting, it’s sensible to make any qualifying capital expenditure up to the £100k limit before the end of the tax year. If your servers are struggling or your laptops are on their last legs, then this is the time to invest in new IT equipment that will take your business forward in the new financial year. If you need advice on what equipment it is wise to replace at this time, please @pensar.co.uk">contact us and we’d be happy to help.
Update – October 2011:
The allowance is being decreased to £25k in the next tax year. So it makes sense to utilise as much of the £100k allowance before 31st March 2012.
N.B. – Obviously, it is recommended to check with your accountant to establish your individual position.
Tags: AIA, Capex, HMRC, IT equipment, Tax
