Out of a total of 250 businesses surveyed before the government’s March 2014 budget statement, only five (2%) knew that they could claim back up to £250,000 through the government’s annual investment allowance (AIA) scheme.
Businesses investing in plant, machinery or commercial vehicles have been entitled to claim AIA since legislation was introduced in 2008. But in the chancellor’s 2012 autumn statement, the AIA was raised from £25,000 to £250,000. Following the 2014 budget the AIA doubled to £500,000.
Paul Jennings, Managing Director at JCB Finance, said: “Companies of all sizes are eligible for the AIA but many are simply missing out. For many the deadline to claim the first tranche of AIA has already disappeared. Unfortunately any unspent allowances can’t be carried forward so for some £250,000 in tax relief may already have been lost.”
He added: “The recent budget announcement has not only doubled the size of the AIA but has extended the period of eligibility by another year to 31st December 2015 but the AIA is scheduled to revert back to £25,000 from 1st January 2016. Businesses need to review their spending plans before it is too late.”
“Unfortunately our survey shows that there seems to be confusion in the construction and plant hire sector over the size and eligibility of the available tax relief.”
“It seems that some financial advisors have been slow in coming to terms with the new rules and some tax saving opportunities have already been lost.”
“Additionally, there seems to be confusion in the plant hire sector with many businesses being wrongly advised that they are not eligible for the AIA.”
JCB’s survey demonstrated that although 53% had heard of the annual investment allowance, only 2% knew how much it was. Around a third wrongly thought that it was still just £25,000 while 47% gave £50,000 as their answer.
Courtesy of Mr Phil Bishop, Online Editor responsible for the daily news service http://www.theconstructionindex.co.uk/news/view/