The Annual Investment Allowance will be increased from £25,000 to £250,000 per annum for a 2 year period commencing from 1 January 2013.
This is a major development for all businesses, who will be able to claim 100% tax relief on expenditure of up to £250,000 in each of 2013 and 2014. That is instead of the current level of £25,000 - an increase of 10 fold to try and increase investment. It is reckoned that 99% of all businesses do not spend more than £250,000 each year. Careful planning on the timing of your capital expenditure needs is essential to take advantage of this tax break.