Andrew Allcock

£1 million Annual Investment Allowance to stay for another year

News

​An extension to the Annual Investment Allowance (AIA) of £1 million has been made for another year. The extension had been due to expire on 31 December, but businesses, including manufacturing firms, can continue to claim up to £1 million in same-year tax relief through the Annual Investment Allowance (AIA) for capital investments in plant and machinery assets until 1 January 2022. The rate would have fallen back to £200,000, otherwise.

The Manufacturing Technologies Association (MTA), which represents suppliers of machine tools, cutting tool, workholding, software and more, wrote to the Chancellor earlier in the autumn on this matter and says “this news is welcome, as MTA members and their customers face the double uncertainties of Covid-19 and Brexit”.

Financial Secretary to the Treasury Jesse Norman announced the extension: “It is vital that we support business through the difficult months ahead.Extending the Annual Investment Allowance’s £1 million cap will give businesses the confidence they need to invest into next year, helping them to grow whilst benefitting the wider economy too.”