Annual Investment Allowance (AIA)

The Annual Investment Allowance (AIA) is a tax relief that is claimable by sole traders, limited companies and partnerships. If you are a sole trader, you can claim it for purchasing equipment used for your business, such as tools or a laptop. If you buy a piece of equipment that qualifies for AIA, you can deduct the full cost when you calculate your annual profit and the relevant tax.

AIA was first introduced in 2008 to encourage businesses to invest in property and equipment to boost economic growth. Below are some examples of purchases that you can claim back as part of AIA:

  • Computer equipment
  • Land
  • Machinery
  • Office furniture
  • Specific vehicles
  • Air conditioning
  • Farming equipment

You then owe tax based on your income minus your AIA purchases. Be sure to check with an accountant as to the purchases that qualify for AIA as not every piece of equipment will be eligible, even if you intend to use it for your business.

Frequently Asked Questions

  • Which vehicles qualify for AIA?

    A specialised van, eg. a tow-truck may qualify, whereas a standard car would not qualify as this could be deemed as a personal purchase that you just also use for work. When you look to claim a new vehicle as part of your AIA you should check with an expert for clarification.

  • When do I pay my income tax?

    Self-Assessment tax returns must be filed with HM Revenue and Customs by 31st January following the end of the tax year. For help with your tax return, contact our experts today.

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