To our amazement, not many of our clients know the Annual Investment Allowance exists until we mention that they are eligible to claim it. Are you one of these people? If so you may be missing out on £50,000 worth of capital allowances per year. Let me explain in more detail and in plain English for you.
If you have bought equipment for your business, this would include business furniture, vans (not including cars), computers and tools on or after 6th April 2008 you can claim the full amount you paid for these items in the same tax year as it was purchased up to the combined value of £50,000. On past Tax Returns you would only have been able to claim 20% of its value per year. If after calculating how much you have spent, the total is over £50,000 then any balance over this would be subject to the normal 20% capital allowance per year.
As you can see this allowance can significantly reduce your tax liability. If in doubt, contact your current tax advisor to see if you are eligible, and if so, ask if this been claimed on your behalf.