From April 2012 the amount of capital expenditure that qualifies for 100% year one write off is reducing from £100,000 to £25,000.

Business owners might want to bring forward plans to invest in machinery, before the qualifying amount is reduced.

This allowance is called the Annual Investment Allowance (AIA).
It enables all businesses to reduce their profit by the amount spent on plant and machinery (excluding cars) up to a maximum amount, currently £100,000 but set to reduce to £25,000.

Where an accounting period spans 1 April 2012, the maximum amount of AIA is calculated on a pro rata basis
eg 6 months @ £100,000 +
6 months @ £25,000 = £62,500

There are also allowances for environmental equipment, known as Enhanced Capital Allowances (ECA). The relief under these will continue to be 100% on the amount spent. The categories of expenditure are:
Energy Saving Equipment. The equipment must have been certified as meeting energy efficiency criteria
Water-efficient Equipment. Again the equipment has to have been certified as reducing water use, improving quality, or saving energy
Electric Cars and Low (up to 110 g/km) CO2 emission cars

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