Measure

Extension of annual investment allowance

The measure

The government has announced an extension to the temporary annual investment allowance limit of £1m for expenditure incurred on the provision of plant and machinery until 31 December 2021. 

 

Who will be affected?

Businesses (including groups), that incur annual capital expenditure on plant and machinery assets up to £1m from 1 January 2021.

 

When will the measure come into effect?

The measure will come into effect from 1 January 2021 until 31 December 2021.

Our view

This extension maintains the existing annual incentives limit for businesses to invest in both main pool and special rate plant and machinery, which had been due to revert to £200,000 from 1 January 2021. This, together with the temporary first year allowances and super deduction for plant and machinery announced today, provides strong fiscal encouragement for businesses to bring forward their plans for investment in new plant and machinery.