What is capital allowance tax relief?

What is capital allowance tax relief?

Nick Robinson

Nick Robinson

Jun 02, 2017 | Business

Capital allowance tax relief allows businesses to write off the costs of capital assets against their taxable profits. Through the Annual Investment Allowance, businesses can claim up to £200,000 of their annual investment in plant and machinery aside from cars. A wide range of businesses can take advantage of the AIA, though there are provisions in place to stop multiple claims being made.

Maximise tax relief

At Yorkshire Accountancy, we can give you advice on maximising capital allowance tax relief. Whether you can get relief will depend on what you are claiming for. You could even benefit from the initiative if you have acquired goods via hire purchase. Assets you have obtained this way will be treated as if an outright purchase has been made. The rules can be complex, and things like finance leases will be allowed as tax deductible expenses as opposed to being given capital allowance. The complexity of the rules means that it’s usually wise to seek out professional advice from a reputable firm like Yorkshire Accountancy.

Plant and machinery

Plant and machinery can include machines, furniture, some fixtures, computers and similar items used in your business. You can receive a 100% deduction on the cost of most plant and machinery you have purchased up to an annual limit. If you spend more than your annual limit, you can get an annual writing down allowance of 18% or 8% depending on the kind of asset. Cars are not eligible for the AIA but can benefit from the WDA. A 100% allowance is available for new environmentally-friendly equipment.

Make the most of your allowances

We do advise you to get in touch before you incur a cost so we can help you make the most of the AIA that’s available to you. Don’t miss out on any capital allowance tax relief you may be able to take advantage of. At Yorkshire Accountancy, we have helped a wide range of businesses to take advantage of the AIA and the WDA. We can advise you on the sales of assets and timing purchases to meet your needs and obligations. Get in touch with us today on 01482 845750, via info@yorkshireaccountants or through the online contact form to find out more.

 

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