The government has extended its temporary higher Annual Investment Allowance (AIA) limit of £1m for a further year.
The AIA was due to revert to its original £200,000 on 1 January 2021. But it has been extended by 12 months to stimulate
business investment as the economy continues to grapple with the coronavirus pandemic.
The extension means businesses – including farms – can continue to claim up to £1m in same-year tax relief through the AIA for capital investments in plant and machinery assets until 1 January 2022.
Martyn Dobinson, partner at accountancy firm Saffery Champness, said: “This is good news for an under pressure rural and agri sector. This will accelerate tax relief and reduce tax cash outflow for those taking advantage of the extension.”
Treasury secretary Jesse Norman said the government would also deliver on its commitment to help protect UK taxpayers by clamping down on promoters of tax avoidance schemes.