Annual Investment Allowance

Using the Annual Investment Allowance for growth

What is the Annual Investment Allowance?

The Annual Investment Allowance (AIA) lets the business deduct the cost of certain assets from their taxable profits. This means, in theory, that companies can deduct up to £1m from their taxable profits, saving a substantial amount of money as long as they have invested the money in qualifying expenditure.

You can claim AIA on most assets purchased for use by businesses. It also applies to hire purchase, although not lease-based assets.

Qualifying expenditure covers most purchases of plant and machinery including building parts and fixtures, some vehicles (though not cars for private use), heating systems, lifts, air conditioning, lighting systems and specialist equipment integral to running your business.

Items must be bought and owned, not rented or gifted to you, and if you end up selling an item that benefited from AIA, then you may have to pay tax subsequently.

Annual Investment Allowance: helping businesses grow

The Annual Investment Allowance increase to £1m per annum has been extended to  the end of 2021. This is a significant boost to businesses looking to invest in capital equipment.

Why choose Lombard?

At Lombard, lending is all we do, and we’ve been doing it for over 150 years. We are here to support your business with the Annual Investment Allowance. We provide asset finance for firms of all sizes, from small family concerns to large commercial enterprises and across sectors, from manufacturing to renewable energy, technology, agriculture and vehicles and fleets

To discover more, simply download the factsheet below.

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You can rely on our proactive attitude to lending to produce the flexible finance your business needs, when you need it

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Want to utilise your AIA?

Make the most of your AIA and its beneficial tax implications with Lombard.

 If you are looking to finance an asset you could get a quote now or speak to one of our experts.

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One of our specialist team will discuss your specific needs

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Increase in annual investment allowance over time

The AIA amount has changed several times since 2008. If the AIA amount changed during the period you are claiming for, you would need to adjust the amount you can claim.

Visit the Government website for more information about AIA.

For specific tax advice, please speak to your accountant.