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Just a reminder that from 31 March 2012 (companies) or 5 April 2012 (sole traders / partnerships), Annual Investment Allowance, AIA, will reduce from £100,000 to £25,000.

AIA is the annual total amount of Capital Expenditure that can be written off against tax at the time of it being incurred, rather than over a period of years.

AIA only applies to equipment including vans.  Purchase of cars or premises don’t count.

Amounts spent in excess of AIA are carried forward and releived at a lower amount, proposed to be 18% per annum from next year – so you get the tax relief but over a number of years.

The key messgae is if you are planning investment in equipment and/or vans in excess of £25,000 then it should be planned for before 31.3.12.