The temporary £1,000,000 Annual Investment Allowance (AIA) cap was due to end on 31 March 2023, but instead was made permanent in the 2023 Budget.
This means that businesses with high levels of capital expenditure can continue to claim up to £1,000,000 AIA in the same chargeable period for investments in plant and machinery assets. Claims can only be made for AIA in the period in which the item was purchased.
Businesses should deduct the full value of an item that qualifies for AIA from their profits before tax. Claims can be made for most plant and machinery purchases, up to the AIA amount, click here to view qualifying expenditure.
Where capital expenditure in the chargeable period exceeds the £1,000,000 limit, a claim for full expensing, as introduced in the 2023 Budget, may be made. Find out more about full expensing here.