With the Budget 2018 announced just a few days before Halloween, there was much speculation about whether the Chancellor’s famous red Budget Box would be full of tricks or treats. As the last Budget before Brexit, it was highly anticipated by both business owners and individuals.
During Pierce’s annual Budget Breakfast event, which welcomes business leaders and clients from across Lancashire, Chairman John Green described Philip Hammond’s latest announcement as ‘the most small business friendly budget ever’ which had ‘enterprise at the heart.’
For me, the most welcomed announcement was the Chancellor’s helping hand to kick start business investment by increasing the Annual Investment Allowance (AIA) from £200,000 to £1m. The increment provides opportunities for businesses to gain significant tax relief when they invest in plant or machinery.
During his speech, Hammond said the aim of the increase was to ‘stimulate business investment’ and it is a strategic move to help boost business confidence during uncertain times as Brexit creeps even closer.
In my experience, since the AIA was introduced a decade ago back in 2008, it has encouraged business owners to move forward investment plans and I’m sure that this announcement will encourage even further growth.
With the increased amount available from 1 January 2019 – 31 December 2020, I would urge businesses to look at their investment ambitions and maximise on this opportunity while they can.
The timing of the investment is critical, the expenditure must be incurred at the correct time and in accordance with the rules. Your accounting period end will influence the ideal timing.
Available to an individual, partnership or company carrying on a trade, profession or vocation, a UK non-residential property business or a furnished holiday let, the AIA covers plant and machinery, vans, lorries, equipment, building fixtures and computers.