Are you a business owner or looking to maximise your tax savings? If so, the Annual Investment Allowance (AIA) is an excellent opportunity for you to do just that. With just a little over two weeks before the next financial year starts, this is your last opportunity to make the most of the increased AIA. But how can you take full advantage of this allowance and turn it into financial growth for your business? In this blog post, we’ll be discussing exactly how finance can help you leverage the AIA to its fullest potential. So grab a cup of coffee and join us as we explore the world of tax savings!

Annual Investment Allowance Introduction

The Annual Investment Allowance (AIA) is a tax relief that allows businesses to deduct the cost of certain qualifying capital expenditures from their taxable profits. The AIA was introduced in 2008 and has been increased and decreased several times since then. For the 2022/23 tax year, the AIA has temporarily been increased to £1 million.

Capital expenditures that qualify for the AIA include machinery, equipment, vehicles, and fixtures.

If your business is eligible for the AIA, you can claim it by including details of your expenditure in your company tax return. You must keep records of your expenditure in order to claim the AIA.

Taking advantage of AIA

If you’re looking to take advantage of this allowance, there are a few things you need to know. Here’s a quick guide on how to use finance to take advantage of the AIA.

First, it’s important to note that the AIA only applies to investment in plant and machinery. This includes equipment such as trucks, vans and scaffolding materials, but also office furniture and computers. It does not apply to investments in land or property.

Second, the AIA is only available if you purchase the asset outright or on a hire purchase finance agreement. This means that leasing or renting equipment does not qualify for the relief. If you buy something under a hire purchase contract you can claim for the payments you have not yet made when you start using the item. You cannot claim on the interest payments or charges.

Third, the AIA is capped at £1 million per year. This means that if you invest more than £1 million in plant and machinery in a single year, you will only get relief on the first £1 million of investment.

How can Scaffold Finance help?

At Scaffold Finance we specialise in helping scaffolding contractors finance assets such as trucks, vans and scaffolding materials.

We have a large panel of lenders offering industry leasing rates on hire purchase agreements.

If you’d like a hire purchase quote, then please contact us on 01494 506383 or send an email to hello@scaffoldfinance.co.uk