Annual Investment Allowance

The Annual Investment Allowance (AIA) is a tax relief in the UK that allows businesses to deduct the cost of qualifying capital assets, like equipment or machinery, from their profits in the year they are purchased. This means businesses can reduce their taxable income by the full amount up to a specific annual limit, encouraging investment in growth. Once the limit is reached, additional spending on assets may be eligible for different tax treatments. The AIA simplifies the process of claiming capital expenditure and provides immediate tax benefits, promoting business investment and expansion.