Annual Investment Allowance — why private equity-backed groups need to take extra care The Annual Investment Allowance (AIA) is a valuable relief for businesses investing in plant and machinery. It allows companies to deduct up to £1 million of qualifying expenditure from their taxable profits in the year the investment is made. However, the rules are not always straightforward. In particular, groups of companies and businesses under common control may need to share a single

When businesses invest in plant and machinery, one of the key considerations for tax relief is how that expenditure is classified. A particularly important category is long-life assets, which are subject to specific capital allowances treatment. What is a Long-Life Asset? A long-life asset is an item of plant or machinery that is expected to have a useful economic life of at least 25 years. If the asset is new, the expectation is based on its anticipated lifespan from first u