From 1 January 2019 to 31 December 2020 a temporary increase in the AIA has been introduced by the Government. The idea is to enable faster tax relief for plant and machinery investments between £200,000 and £1 million, with the aim of helping businesses invest and grow. However, the latest survey by the MTA and Close Brothers Asset Finance has found that despite the increase in AIA, manufacturing and engineering firms are not changing their plans to invest in new equipment.
Also revealed by the survey is that only 45% of engineering/manufacturing businesses are planning to increase investment in 2019 as a result of the rise in the AIA, with just 16% planning a significant increase.
James Selka, CEO of the MTA, says: “The increase to the AIA is a great opportunity for UK manufacturing and engineering firms to invest in new equipment and embrace technologies that could transform their businesses. More needs to be done to get the message out there to invest, and more support is needed to help stimulate these purchases.
“The MTA was pleased to see that the Budget included the expansion of the AIA from £200,000 to £1 million,” he continues. “This was a specific ‘ask’ from the MTA and will make investing in equipment more cost-effective and give the UK the opportunity to be more competitive on an international stage. Now, companies need to use this allowance and invest in their future”
Steve Gee, CEO of Close Brothers Asset Finance's industrial equipment division, says: “The AIA is there to help companies invest in their future. Close Brothers Asset Finance are at hand to support and guide firms through this process and ensure they are maximising their return on investment.”
