JCB Finance is urging customers not to avoid mssing out on temporarily enhanced tax relief.
Firms that have made taxable profits can benefit from the temporary increase in Annual Investment Allowance (AIA) tax relief, which was announced in the 2018 Autumn Budget. The AIA was increased to £1 million per year until 1st January 2021 to help support British Businesses to invest and grow, by accelerating the relief that would normally be applied over several years.
JCB Finance said that while January 2021 might seem a long way off, depending on a business’s financial year-end, the cut off for benefiting from the increase can be ‘sooner rather than later’. For example, if a company’s financial year-end is March, it will need to make the purchase(s) or enter into a Hire Purchase agreement before the 1st April 2020, otherwise the allowance available would begin to reduce and progressively revert to the £200,000.
Businesses, including those in plant hire, can claim the AIA against qualifying assets like plant and machinery or commercial vehicles placed on Hire Purchase just as if they had paid cash.
Companies have also been encouraged to check out the lead times on orders of new plant and machinery because the relief is only available in the financial year in which you make the purchase.
Rob Heldreich, finance director at JCB Finance eplained, “The temporary increase in the Annual Investment Allowance was a welcome boost for business when announced in 2018. Time is running out to take advantage of this incentive to invest in plant and equipment. I would urge business owners to speak to their accountants and advisors to ensure they get the timing of purchases right to ensure they maximise the available tax savings.”
