The tax relief you receive on the purchase of assets for your business such as computers, equipment and vehicles is set for a bumpy ride over the next couple of years.You therefore need to start thinking about the timing of your purchases in order to maximise the tax relief on your investment.
A welcome change in the recent ‘Emergency Budget’ was an increase in the Annual Investment Allowance limit from £50,000 to £100,000. This means that in any financial year you can now spend up to £100,000 on asset purchases and get relief against your tax bill straight away. If you spend more than that limit then your tax relief will be spread over the period of ownership.
Slightly less generous was the announcement that with effect from 6th April 2012 (or 1st April 2012 for companies) this limit will reduce down to £25,000. Therefore, if you are planning on making some sizeable business purchases within the next couple of years you need to get the timing right as delaying could cost you a considerable amount of tax relief.
