Changes to capital allowances – maximise tax relief now


Richard Haines, Senior Manager, Rural Services, Melksham


The current Annual Investment Allowance (AIA) which enables 100% write off for plant and machinery expenditure in any accounting year is due to reduce from the current £100,000 allowance to only £25,000 from 6 April 2012 for individuals and partnerships (1 April for companies).


The writing down allowance for the expenditure over and above the AIA threshold is also reducing from 20% per annum to only 18%.


In order to accelerate the rate at which tax relief is available, it is vital that businesses fully utilize the


£100,000 available in the run up to the end of the tax year. If there is any capital expenditure planned for the next 6-12 months it should be considered if this expenditure can be brought forward in order to crystallize the tax relief in the 2011/12 tax year.


During February and March at Old Mill we work with many of our clients to prepare management accounts to estimate tax liabilities and calculate where this planned capital expenditure should be brought forward. This gives us and our clients the opportunity to assess if capital allowances have been fully utilized in each business and also allows for plenty of time to plan other tax saving ideas before the end of the fiscal year such as pension contributions and other tax efficient investments.


Contact Old Mill – rural contacts


Exeter Andrew Vickery Berkeley House, Dix’s Field, Exeter, Devon EX1 1PZ Tel: 01392 214635 Fax: 01392 214690 Email: exeter@oldmillgroup.co.uk


Melksham


Mike Butler, Paul Neate, Richard Haines, John Smith Unit 4 Challeymead Business Park, Melksham, Wiltshire, SN12 8BU Tel: 01225 701210 Fax: 01225 709817 Email: melksham@oldmillgroup.co.uk


Shepton Mallet


Ian Sharpe, Rebecca Hobbs and Wendy Macklin The Old Mill, Park Road, Shepton Mallet, Somerset BA4 5BS Tel: 01749 343366 Fax: 01749 344986 Email: sheptonmallet@oldmillgroup.co.uk


Yeovil


Mike Butler, Neil Cox, Martin Taylor and Peter Skelly Number One Goldcroft, Yeovil, Somerset BA21 4DX Tel: 01935 426181 Fax: 01935 431852 Email: yeovil@oldmillgroup.co.uk


www.oldmillgroup.co.uk The content of this newsletter is for general information only. It should not be relied on and action which could affect your business should


not be taken without appropriate professional advice. Please contact your usual Old Mill contact or local Old Mill office.


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