Government extends Annual Investment Allowance (AIA)

16.11.2020
Shaun Davison
News

In lieu of the autumn budget, the government have confirmed the £1 million Annual Investment Allowance (AIA) will be extended until 1 January 2022.

The AIA is a form of tax relief (capital allowance) that is available for businesses investing in plant and machinery, enabling them to make a full tax deduction for qualifying capital expenditure up to an annual maximum. 

The standard AIA is set at £200,000, however, was temporarily increased to £1 million from 1 January 2019, to help accelerate business investments and grow the economy. The AIA was originally due to revert to £200,000 from 1 January 2021. 

The government have announced that the £1 million temporary limit will be extended until 1 January 2022, which will provide businesses with the confidence to invest into next year as they recover from the coronavirus pandemic and to look to grow for the future.

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