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HMRC have published a short guide to explain how Annual Investment Allowance (AIA) works and to inform about the temporary increase in AIA to £500,000 to support business investment say Harris & Co accountants Northampton #accountantsnorthampton

As announced in Budget 2014, the temporary increase will cover expenditure incurred from 1 April 2014 for corporation tax (CT) and 6 April 2014 for income tax (IT) to 31 December 2015, after which it will return to £25,000.

The maximum amount of AIA was temporarily increased to £250,000 from £25,000 for the period from 1 January 2013 to 31 December 2014. Budget 2014 extended the period of the temporary increase to 31 December 2015 and further increased the amount of AIA to £500,000 from April 2014.

AIA is available to most companies, individuals and partnerships and can be claimed for most assets purchased by a business. Cars are specifically excluded.

The guide is available from HMRC.

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