Autumn Statement 2022 changes to capital allowances

On Thursday 17th November 2022, Jeremy Hunt, Chancellor of the Exchequer, took to the podium revealing the UK government's plan to stabilise finances and retrieve losses with the new Autumn Statement. We have taken a look to better understand how capital allowances have been affected and this is what we have found so far.

Annual Investment Allowance (AIA) increased limit, to remain

AIA has given businesses, that are investing in commercial property, the opportunity to claim tax relief against the total value of qualifying expenditure. As previously announced, the £1 million limit will be made permanent. Careful tax planning regarding the timing of new capital expenditure can take advantage of the £1m limit in two accounting periods.

Learn more about AIA.

Corporation tax rate increase to go ahead

Despite rumours of this being cancelled, it has now been confirmed that this is going ahead. The Corporation Tax rate for annual profits greater than £250,000 will increase to 25%. With marginal relief available for profits between £50,000 and £250,000. Companies making profits of £50,000 or less will continue to pay tax at the current rate of 19%. This will be put in place starting April 2023.

Super-deduction changes

Super-deduction will expire on 31st March 2023 as originally planned.

Learn more about super-deduction.

What does our Claims Manager think of the Autumn Statement changes?

“The headline news was all about the increase in the Corporation Tax rate to 25%. However, many small businesses will not make profits of over £250k and will therefore not be subjected to the full tax increase. Keeping the AIA limit at £1m is good news and will hopefully continue to give some incentive for businesses to invest in capital expenditure, including property improvements.”

Lean on our expertise to ensure you have secured all available tax relief...

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