As announced and confirmed in the spring budget at the end of March 2023, the Super Deduction scheme came to an end on the 31 March 2023. However, the Annual Investment Allowance (AIA) is set to remain available for UK businesses to utilise. Could you utilise it to help you supercharge your investment in technology?
What is the AIA?
The AIA is a tax relief measure for UK businesses that allows them to claim tax relief on qualifying capital expenditure in the year it is incurred. This allowance was introduced by the UK government to encourage businesses to invest.
The AIA provides a 100% tax deduction on the cost of qualifying capital expenditure, up to a set limit. The limit was temporarily increased to £1 million per year from 1 January 2019 until 31 December 2020 to encourage businesses to invest in the economy during the COVID-19 pandemic. This was further extended until March 2023 and currently, remains at £1 million.
Can you still claim AIA?
You can claim on certain types of technology, like computer hardware and software, as long as you use them for business. The technology needs to be something new that the business bought and owns. However, some technology expenses might not be eligible for AIA, so it's important you check with a tax and finance professional.
How you can benefit from the AIA
If you’re a company that buys technology, you can benefit from AIA by claiming a tax deduction on the cost of qualifying technology purchases. This means that you can reduce your taxable profits by the amount you spend on eligible technology, up to the limit of the AIA.
For example, if you spend £50,000 on tech purchases and the AIA limit is £200,000, your company can deduct the full £50,000 from your taxable profits. This can result in significant tax savings for your business.
By taking advantage of the AIA, you can reduce your tax bills and free up cash flow to invest in other areas of your operations. This can help your business grow and expand, which is why the AIA was introduced by the UK government as an incentive for businesses.
How we can help
We have partnered with Bluestone, an independent broker with over 25-years’ experience providing bespoke finance solutions to UK businesses, to support our clients with solutions to support their financial needs. Bluestone specialises in supporting businesses to utilise AIA whilst it’s available. They are also able to advise on how leasing technology infrastructure could make sense for your business.
For further information and an introduction to Bluestone please email
us or call on 01625 613 633.