The 6th April 2012 will see the level of Annual Investment Allowance (AIA) cut from £100,000 to £25,000. The allowance has been £100,000 since April 2010 when it was increased from £50,000 in order to stimulate growth within the economy by encouraging businesses to spend.

AIA is a form of capital allowance which offers tax relief at 100% on all qualifying expenditure in the year of the purchase up to the maximum allowance permitted (£100,000 until April 2012).

For businesses that have an accounting period ending after the 31st March the amount of relief available under the AIA is apportioned accordingly.

As an adviser to all types of businesses, I understand the importance of businesses being aware of the best times to incur their capital expenditure in order to attract the maximum allowances.  Any business considering any significant spending on qualifying capital expenditure could well be advised to bring forward that spending to before April 2012 to ensure they achieve the maximum allowances available.