Annual Investment Allowance
- Spend up to £50,000 on plant & machinery and write-off 100% against taxable profits to end of current tax year
- Applies to commercial vehicles, but not cars
- Additional expenditure qualifies for 40% write-off against taxable profits under First Year Allowance
The AIA & WDA Explained
The Annual Investment Allowance was introduced in 2008 as part of the Goverment's reform of business taxation. It applies to all bisinesses (sole traders, partenerships and comanies) investing in plant and machinery. This includes van and trucks.
Using the AIA, business can write off the first £50,000 of expenditure on most purchases of plant and machinery each year against their taxable income.
The AIA can be used for purchases of commercial vehicles, both new and used.
If a business spends more than £50,000 on plant and machinery, the additional expenditure is also eligible for tax relief at the standard WDA rate of 20%.
For more information please download The AIA PDF