The 100% Annual Investment Allowance (AIA) limit will be slashed to £25,000 from £100,000 from 6 April 2012. (Also, expenditure over £25,000 will only attract allowances at 18%).
But what if your year end straddles 5 April 2012? An example would be a 30 June 2012 year end would have a maximum AIA of £82,377, but most of this must be spent before 5 April 2012. The expenditure that can qualify for AIA between 6 April 2012 and 30 June 2012 is just £5,874! So any large capital investments, tractors, combines etc, need to be committed and contracted for prior to 5 April 2012.
New Building Costs must not be ignored when claiming capital allowances. Please review all new buildings for capital allowances qualifying for AIA or Integral Features! All farmers should prepare a capital expenditure forecast to maximise the available tax relief.