Autumn Budget 2018: 5x increase in annual investment allowance too short-term

As featured in The Times – 30.10.18

In the 2018 Autumn Budget, the Chancellor announced the Government will increase the Annual Investment Allowance (AIA) to £1 million from 1 January 2019, up from £200,000. The increase will affect all qualifying investment in plant and machinery made on or after 1 January 2019 until 31 December 2020, to help stimulate business investment.

Mike Cooper, business tax partner in our owner managed business group, comments: “This is a significant and welcome increase in the Annual Investment Allowance, despite the measure only lasting for a short amount of time.

“It seems that the short-time frame is to encourage businesses to keep investing ahead of Brexit.

“There are already signs that Brexit has led to businesses putting off their investment decisions. If businesses stop investing it will drag down economic growth.

“The number of capital allowance claims have fallen over the past year, showing a stimulus was needed to get investment going.”

To discuss the recent changes announced, please contact Mike Cooper or your usual Moore Stephens contact.

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