Our research indicates that British businesses will invest a record £2.8 billion under the Annual Investment Allowance this year.
HMRC's internal projections anticipate that capital investments by businesses using the Annual Investment Allowance are set to rise 22% from the £2.3 billion invested last year.
The Annual Investment Allowance was first introduced in April 2008, and is aimed at stimulating economic growth by allowing businesses to limit the risk of investing in machinery and equipment during times of economic uncertainty. It originally allowed businesses to claim up to £50,000 of tax relief on capital investments. The limit has since been temporarily raised to £500,000, but is set to be reduced to just £25,000 at the end of 2015.
The figures illustrate that businesses are now committing to investing for growth.
Our managing director, Peter Alderson, highlights that businesses can stretch their investment budgets further by using asset finance to spread the cost of the equipment they need, while still making full use of the Annual Investment Allowance, especially at its current level.
Here at LDF we are aiming to increase the amount of funding we provide to businesses through asset finance. We have recently worked with manufacturers throughout the UK to fund their plans for growth. We are able to fund a broad spectrum of capital expenditures, including IT hardware, office refits, manufacturing and engineering equipment, plant and commercial vehicles.
Our managing director says that the Annual Investment Allowance has been a great success in helping businesses, especially SMEs, to make the capital investments they need to grow and thrive as the economy improves.
We are calling upon the Chancellor to maintain the Allowance at its current level in the Budget next month. The pump is primed for even greater business investment in equipment that will enhance productivity and enable businesses to grow, and the Allowance has played a key role in giving companies the confidence to increase their investments over the past two years.