Maximise Your Capital Allowances Claims

With the tax year end coming up fast you should consider the timing of purchases so as to maximise the capital allowances available.  Bringing forward capital expenditure into the current tax year you can increase the amount of relief available and reduce your income tax significantly. With the changes to the annual investment allowance such that for 2010/2011 and 2011/2012 the amount available is £100,000 for each tax year, business owners should consider utilising these amounts before the Annual Investment Allowance reduces to £25,000 for 2012/2013.

In addition, claiming the annual investment allowance may also impact upon your Tax Credits Claim for the year.  Given that the Tax Credits regime is becoming less generous, you should consider maximising your claim now and see the cash flow and tax advantage utilised earlier.

With Government incentives for energy efficient plant and machinery, environmentally friendly vehicles and energy efficient plant, you could get 100% first year allowances on a whole host of items purchased through the business.

Extract taken from our 2011 Bonus edition Tax newsletter – if you would like to subscribe please leave your details here.

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