“For example, if a builder had a year-end of 31st March, the maximum Annual Investment Allowance they would be able to claim on an asset bought in January 2013 will be only 1/4 of £250,000,” explains Allan.

“The same asset bought by another building firm with a year-end of 30th September would qualify for relief at 3/4 of £250,000. Any balance of expenditure not qualifying in the first year will be available for writing down allowances at reduced rates in future years.”

In other words, it’s not quite as easy as going out and buying two Vauxhall Vivaro panel vans at £19,048.33 each and writing off 100% of your assets against tax.

Allan Ross, First Independent Financial

Allan Ross, from First Independent Financial, says take advantage of the Annual Investment Allowance, but take financial advice before doing so

“No it’s not,” concurs Allan. “But the potential to save on tax for investment in assets like this should not be overlooked.”

Chief Executive of the Forum of Private Business, Phil Orford, shares the same enthusiasm for this new investment allowance.

“We urge businesses to take advantage of it. There are big savings to be had here for firms who’ve been waiting for the right time to invest and upgrade equipment, and this kind of spending tends to wash right down the supply chain.”

And that’s exactly the sort of capital investment the Chancellor wants to encourage to get the British economy moving again.

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