Annual Investment Allowance

Announced in Philip Hammond’s Budget of 29th October 2018 the measure will provide significantly faster tax relief for plant and machinery investments between £200,000 (current cap) and £1 million, helping businesses to invest and grow. Capped at £1 million it starts from January 2019 and lasts for a period of 2 years when it will revert back to £200,000 p.a.

In effect the total cost of the plant/ machinery purchase can be offset against that company’s taxable profit for the year. In effect this could result in a saving of 19% (current corporation tax rate) on any plant/ machinery acquisitions.

Examples of Qualifying Expenditure

‘Plant or machinery’ covers almost every sort of asset a person may buy for the purposes of his/her business. Really the only business assets not covered are land, buildings and cars (which are excluded by one of the ‘general exclusions’). Typical examples of plant or machinery include:

• Vans, lorries, trucks, forklifts, crane, diggers and other construction plant.
• Manufacturing machinery, waste/ recycling equipment, garage equipment.
• Computers and all kinds of office furniture and equipment.
• Other building fixtures, such as shop fittings, security systems, industrial racking, kitchen and bathroom fittings.
• All kinds of business machines such as lathes, tooling mach ines and printing presses.
• Tractors, combine harvesters and other agricultural machinery.
• Computerised /computer aided machinery, including robotic machines.