We’re pleased to see the extension of the Annual Investment Allowance threshold for another year. Last Friday, a ministerial statement from Jesse Norman, the Financial Secretary to the Treasury, made several important tax policy announcements, including the publication of draft legislation and new consultations.
One of the most encouraging was the aforementioned extension to the Annual Investment Allowance threshold. This, in our opinion, certainly makes sense as we should be encouraging investment in this type of expenditure. More specifically, the announcement stated that the planned reduction to this allowance from £1M per annum to only £200,000 per annum was being postponed and the threshold will remain at £1M, from 1st January next year.
This means that more investment can qualify and also that any investments which might not have made the year-end deadline (due to COVID or indeed Brexit issues), will qualify. This, of course, increases the likelihood of them going ahead and this should be useful for UK business, especially at a time when, thanks to the announcements of what seem to be effective vaccines, business confidence is slowly returning.
Stewart McKinnon, Director