The Annual Investment Allowance (AIA) lets businesses deduct the full cost of most plant and machinery purchases from their profits before tax, up to an annual limit.
The current limit and what qualifies
The AIA limit is currently £1 million per year, covering most equipment, machinery and vans, though not cars. Claiming the full cost upfront rather than spreading it over several years can significantly reduce a tax bill in the year of purchase.
Tax rules depend on individual circumstances and can change. This glossary is general information rather than personalised tax advice.