With the deadline for the new reduced tax allowances fast approaching farmers & landowners should urgently consider the timing of 2012 capital expenditure, to maximise the reliefs available, say Saffery Champness
Mike Harrison, a partner of Saffery Champness Landed Estates & Rural Business Group, says: “Whilst currently taxpayers are able to obtain a 100% for investment in plant and machinery up to £100,000 this relief, known as the Annual Investment Allowance (AIA), reduces to only £25,000 from April 2012.
Also from April any excess capital expenditure will only benefit from writing down allowance, and that writing down allowance rate is also set to reduce. From April 2012 this will reduce down to 18%. For specific items including features integral to a building, where lower rates apply this is reducing from 10% to 8%.
“Where a business has a year end that does not coincide with the tax year, the AIA is apportioned. For example a 30 June 2012 year end the AIA available in the year will be £81,250 (9/12 x 100,000 + 3/12 x 25,000)”, explains Mike Harrison.
“Furthermore in the part of the accounting period falling after April 2012, only a maximum of £25,000 would be covered. The period as a whole attracts relief of up to £81,250, but for expenditure, in the above example, on plant and machinery in excess of £6,250 this should be purchased before April 2012 as full 100% relief on expenditure in the period between April and June 2012 is restricted to this limit with the balance only receiving relief at 18%. Those businesses that are considering any major equipment purchases would be well advised to consider the timing of these, to maximise the allowances available. AIA is invariably a complex matter and it is always sensible to take professional tax advice when assessing any allowance” Mike Harrison concludes.
For further information, please contact:
Mike Harrison (Saffery Champness Manchester): 0161 200 8383 mike.harrison@saffery.com or
John Vaughan, John Vaughan & Co. Public Relations: 07596 106937 jvaughan@johnvaughan.co.uk
26 January 2012 by , 0 comments
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