Taxation News

Annual Investment Allowance (AIA) - it isn't all it seems

25th January 2013

The Annual Investment Allowance (AIA) is a form of tax relief that allows most businesses to write off the cost of capital expenditure on plant and machinery in full in the year of acquisition against its taxable profits in the year.

Introduced in 2008 at a level of £50,000, this was further increased to £100,000 by the Government in 2010 as an incentive to drive up capital investment. In April 2012, in what was a surprise to most observers, we saw a dramatic drop of this very valuable tax relief to £25,000 but the biggest surprise of all came on 5 December 2012 when the Government increased AIA limits ten fold to £250,000 with effect from 1 January 2013, albeit for a temporary two year period.

But all is not what it seems and this is a warning to all businesses out there! Be very careful ........... your business may not be entitled to the £250,000 immediately nor in the future.

To read more on how this change will affect you, please click here to download our factsheet.


We would encourage you to speak to your usual EQ contact or alternatively email David Morrison on or Lyndsey Orrock on for further advice.

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