AIA limit extended

£1 million Annual Investment Allowance cap extendedThe Treasury has confirmed that the £1 million cap on the Annual Investment Allowance (AIA) is to be extended for an additional year as the government continues to look at ways to stimulate the economy.The AIA provides a tax write off against profits for expenditure incurred on plant and machinery by businesses and owners of commercial property.Businesses can now continue to claim up to £1 million in same-year tax relief through the AIA for capital investments in plant and machinery assets until 1 January 2022. The temporary £1 million cap was originally due to revert to £200,000 on 1 January 2021.Commenting on the extension, Jesse Norman, Financial Secretary to the Treasury, said:'It is vital that we support business through the difficult months ahead.'Extending the AIA's £1 million cap will give businesses the confidence they need to invest into next year, helping them to grow whilst benefiting the wider economy too.'