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Changes to Capital Allowances.

Capital Allowances on Low Emission Vehicles.

Legislation will be introduced in Finance Bill 2015 to extend the 100% allowance (First Year Allowances -FYA) for expenditure incurred on cars with low carbon dioxide emissions and electrically propelled cars for an additional three years to 31 March 2018.

Annual Investment Allowance – Transitional Rules.

The decision to increase the annual investment allowance (AIA) ten-fold from £25,000 to £250,000 was announced by George Osborne in the 2012 Autumn Statement and will be included in the 2013 Finance Act.

The move to increase the limit to a two year period - for qualifying capital expenditure incurred in the period from 1 January 2013 to 31 December 2014 - is a welcome one for small businesses and, from the perspective of the economy, is intended to boost expenditure and increase growth. However, the fact that the allowance has yo-yoed so much means there are transitional rules which will, no doubt, cause some computational headaches for practitioners.
There were no further changes to the annual investment allowance in the 2013 Budget

Tonmoy Kumar, Manager of the Accounts Department of ABDS comments:
“The ten-fold increase in the AIA limit is a welcome development for small businesses. However, the changes do bring with them some traps for the unwary. We at ABDS recommend that businesses seek advice before incurring capital expenditure in order to avoid any potential pitfalls. Call us now if you are unsure of what and how to maximise your allowances.”

ABDS Chartered Certified Accountants of Southampton.
Tel: 023 8083 6900  E-mail: abds@netaccountants.net

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