Why is AIA important?
Annual Investment Allowance is an important consideration when purchasing a commercial property.
It is used to maximise tax savings and should form a part of the decision process. An expert can confirm what property-embedded fixtures, fittings, or PEFFs attract the best treatment.
AIA can be claimed on most plant and machinery up to the AIA amount. This amount is £1 million.
AIA also highlights the importance of establishing the capital allowances position prior to the completion of a property.
What is Annual Investment Allowance?
Annual Investment Allowance or AIA is a UK tax relief. This relief allows businesses to claim 100% of expenditure on qualifying items within the year the expenditure was incurred, subject to the current limit of £1 million.
What qualifies for AIA?
Expenditure incurred on plant and machinery, embedded fixtures, and fittings.
Were there changes to AIA in 2022?
It was announced in the Autumn Statement on Thursday 17th November 2022 that the increased limit of AIA will remain at £1 million.
How to calculate your AIA?
To ensure the correct qualifying items are being claimed, a qualified tax specialist is required. Get in touch with our expert team for needed support.
AIA in practise
If two properties are being considered it may well be the case that a PEFFs claim is possible on one property but not the other. This knowledge could be a deciding factor in purchasing a property that will afford the maximum tax relief in the future.
From April 2008, the AIA amount has changed several times and you can download the historical changes here.