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09 February 2016 / Craig Simpson
Issue: 4537 / Categories: Comment & Analysis

The reduced annual investment allowance and the attractions of the short-life assets and enhanced capital allowances regimes.


  • The annual investment allowance has been reduced.
  • Short-life assets relief may become more important.
  • Comparison of pooled writing down allowances and short-life asset calculations.
  • Enhanced capital allowances are available but work is required to identify eligible assets.
  • Tax credits may become increasingly favourable when compared with enhanced loss relief as the corporate tax rate falls.
  • Ensure that clients are aware of the tax advantages when considering asset purchases.

The annual investment allowance (AIA) increased greatly after it was introduced in 2008. To put things into perspective the allowance rose from £50 000 before 1 April 2010 to £500 000 in 2015; a ten-fold increase. In recent years this increase has provided a welcome relief for businesses during the harsher...

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