What is the Annual Investment Allowance?
AIA lets you deduct qualifying equipment costs from taxable profits in the period you buy them, within your available allowance. It can reduce your tax bill when you invest in your business.
These answers provide general information, not advice tailored to your circumstances. Rules can change and exceptions may apply — speak to the CASS team before making a tax, accounting or financial decision.
How AIA works
The Annual Investment Allowance, usually shortened to AIA, gives businesses an upfront tax deduction for qualifying plant and machinery. This can include equipment you keep and use in your business. You deduct the qualifying cost from taxable profits in the period the expenditure is incurred, within your available allowance. The deduction affects your tax calculation. Your accounts may still spread the equipment's cost through depreciation over its useful life. AIA is claimed through your business tax return. If you later sell the equipment, there can be a tax adjustment. CASS can help check the purchase and the allowance available before you commit.
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