1.9 Annual Investment Allowance (AIA) and AIA Restrictions

Question 1

What are the special rules to calculate the AIA when the maximum amount of AIA changes? (4 steps)

Answer 1

When the maximum allowance of AIA changes during your accounting period, follow these steps to work out how much you can claim:

1. Divide your accounting period into parts.
2. Work out the maximum amount of AIA for each part.
3. Add them together to work out the total for the whole period.
4. Check if there are any restrictions depending on when you incurred the expense.

Question 2

Who is AIA available to?

And how often?

Answer 2

AIA is available to all businesses. But only one AIA to each business each year.

Question 3

What is the percentage of AIA?

Expenditure on what?

And what does it exclude?

Answer 3

The AIA gives 100% first year allowance for investment in plant and machinery (excluding cars)

Question 4

Is AIA time apportioned for short APs?

Answer 4

If the AP is less than 12 months long, the AIA is proportionately reduced.

Question 5

What is the current AIA amount? Plus illustration

What period does it apply to? i.e. (from and to)

What was the previous amount?

What will the next amount be after the current amount?

DOUBLE CHECK TT

Answer 5

The AIA amount has temporarily increased to £1 million between 1 January 2019 and 31 March 2023.

(£200,000 from 1 April 2023)

ILLUSTRATION NOT AVAILABLE

Question 6

For periods before 1 January 2019, what is the AIA capped amount?

Answer 6

For a 12 month period before 1 January 2019 the capped amount was £200,000.

Question 7

What happens to any unused AIA?

Can it be carried forward?

Answer 7

Any unused AIA will be lost.

No carrying forward.

Question 8

Is AIA available for cars?

Answer 8

No