George Osborne stated before the conservatives got back into power, that if they won the election the proposed drop in AIA ( Annual Investment Allowance) would need to be reviewed as he stated ‘the drop is not acceptable’.
Currently a business can buy up to £500’000.00 per annum on qualifying expenditure and claim AIA in the year of purchase, so effectively getting tax relief on the whole expenditure at the point of buying the asset.
This £500,000.00 level is set to drop to £25000.00 on 1st January 2016.
We are now eagerly awaiting the outcome of the July budget to see what level George Osborne thinks is acceptable for this very valuable allowance.
It is hoped the allowance will be kept at the £500,000.00 level moving forward.