Most expenditure that does not qualify for the Annual Investment Allowance (AIA) will go into the main rate pool, on which an 18% written down allowance is due on a reducing balance basis.
The value of all ‘plant and machinery’ is bought to the main rate pool, unless they fall into:
The general principle is that expenditure must be pooled for the purpose of calculating a person’s entitlement to writing-down allowances.
Certain assets must be added to a single-asset pool or to the special rate pool. All other expenditure is allocated to the main rate pool, where there is an ongoing calculation, with the value of the pool increasing as new expenditure is incurred but decreases as allowances are given, or sale proceeds are received.
Where first-year allowances are available, no writing-down allowances are given in the same period.
In contrast, the same expenditure may attract both an Annual Investment Allowance and writing-down allowance in the same period.
If you have any questions relating Capital Allowances, please feel free to give our team a call. 02071479940
Great news for businesses!! The Annual Investment Allowance (AIA) will be extended for another year.Historically, the AIA, as many will know, has been quite low in comparison to the £1m limit bought into place on 1st January 2019. This increase, has for many, allowed for rapid growth due to it cancelling out the need for the WDA’s and allowing a much quicker cash tax return on capital investment.The ATT had called for Chancellor Rishi Sunak to extend the AIA in the Autumn budget, which given the current climate would give businesses some much needed breathing space into 2021. With the news that the Autumn budget had been cancelled, this seemed highly unlikely to happen.