In January 2013, the amount business owners will be able to write off as tax-deductible capital expenditure in the year of purchase will increase from £25,000 to £250,000. This is a massive boost and far more significant than the previous government’s attempt at encouraging investment amongst business owners.
Back in April 2010 the relief was £100,000, which was also generous, but not perhaps quite large enough to enable a lot of companies to write off all their capital purchases in the first year. This new limit however will achieve that in a single hit and we expect a lot of businesses will take advantage and upgrade their infrastructures.
Apart from being an opportunity for businesses to tax effectively revamp their IT systems, purchase new equipment or invest in new facilities, this is also a clever move by the government to simultaneously help support suppliers and manufacturers. We hear about business owners stalling decision-making because of the continuing economic uncertainty; this policy will mean they will quite literally get to have their cake and eat it, because they will be able to pursue capital investment with a significantly reduced level of financial exposure. Great News for Hopefully it will also mean that the software companies and advanced manufacturing specialists the government wants to sustain will benefit from a much steadier order pipeline next year.
via The Annual Investment Allowance explained – 2013 update.
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