Companies Act 2006 – Implementation – Accounts changes
1 April 2008
Capital Allowances - Annual Investment Allowances (AIA)
With effect from 1 April for companies and 6 April for individuals and partnerships the Annual Investment Allowances replaces First Year Allowances.
Businesses can write off all capital expenditure (this does not include cars) against profits in the year of purchase, up to a maximum of £50,000 each year.
For accounting periods that straddle the effective date the allowance is given on a prorata basis; for example a company with a 30 September 2008 year end
can claim £25,000 of AIA (6/12 of £50,000).
On the downside writing down allowances reduce from 25% to 20% or even 10% for certain classes of assets. |
