Capital allowances 04/08/2010
Recent changes in the levels of Initial Allowances where businesses can get 100% tax relief on certain fixed asset expenditure make the timing of investments more important than ever. Many businesses are not fully aware of the generous tax breaks available. Planning the timing of capital expenditure, especially before the end of the business’s financial year end can advance significant tax savings.
Initial Capital Allowances provide 100% tax relief on certain Plant and Equipment expenditures. This also extends to commercial vehicles. From April 2010 up to £100,000 annual capital expenditure is eligible for 100% tax relief. However from 5 April 2012 this reduces to £25,000. Planning and timing major investments over the next 2 years is, therefore, essential for maximizing tax relief.