Annual Investment Allowance – Prioritise Assets When Spend Exceeds £250k

Hopefully by now, you’ve all got the message that (until the end of 2014) you have full tax relief on the first £250k of capital expenditure.

But what if you spend more than £250k?

If that happens, then make sure you have considered the rates of capital allowances that your new purchases are entitled to.  There are 2 rates: 18% and 8%.

Today’s tip is simply to use AIA first on assets that would otherwise qualify for only 8% capital allowances.  To not prioritise these assets would seriously slow down your tax relief going forward.

Oh, and hopefully you don’t need telling not to claim AIA on assets that would otherwise be entitled to the alternative 100% first year allowance!