Tools & Information
Annual Investment Allowance
What is the Annual Investment Allowance?
Annual Investment Allowance (AIA) allows you to deduct the value of purchases from your taxable profits up to a total of £200,000. This applies to plant (so vans and trucks etc) but not cars which are instead put under Capital Allowances. The AIA can currently be used for finance packages where you purchase the vehicle at the end of the agreement but not for non purchase arrangements such as Contract Hire.
‘Company A’ Makes £100,000 profit during the tax year 2017/18 and invests £60,000 into new vans for the business. They are only taxed on £40,000 instead of £100,000 (profit minus investments in plant and vehicles equals the new taxable amount).
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