The run up to the end of the tax year on 5 April 2025 is a good time to check that your business finances are arranged in the best way possible. This next article in our series about Year End tax planning, we look at available capital allowances.
The Annual Investment Allowance (AIA) now stands at £1 million. Along with general Writing Down Allowances, this will provide relief sufficient for many companies. In addition, companies investing in qualifying new plant and machinery can claim:
- Full Expensing, providing first year allowances (FYAs) of 100% on most new plant and machinery investment which would ordinarily qualify for 18% Writing Down Allowances
- a FYA of 50% on most new plant and machinery investment which would ordinarily qualify for 6% special rate Writing Down Allowances.
These additional reliefs will come into their own where companies or groups make major investments. The disadvantage is that where the FYAs have been claimed, a balancing charge based on proceeds may arise on disposal. You may therefore wish to consider timing capital acquisitions to make maximum use of the AIA instead.
There is also a capital allowance, the Structures and Buildings Allowance, available on some new commercial structures and buildings, which will be relevant to some businesses.
If you’d like to discuss the situation highlighted in this article or talk to us about how we could support you on outsourced accounting services, please get in touch with us on info@teamsas.co.uk or call 0118 911 3777.
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