- The temporary increase in the Annual Investment Allowance to £1 million per annum ceases from 31 December 2020 and reverts to £200,000 from 1 January 2021.
These measures are intended to encourage investment in plant and machinery, and especially in low and zero carbon technologies. The qualifying period for enhanced allowances is increased by four years, and is part of a policy objective to phase out the sale of new petrol, diesel and hybrid cars by 2040 (with consultation to bringing the date forward to 2035), helping the UK reach net zero emissions by 2050.
The structures and buildings allowances are intended to encourage new investment and growth in the commercial sector, and provide a replacement for the previous industrial buildings and hotel allowances, but with a wider scope.
What should you do?
Businesses need to ensure that qualifying Annual Investment Allowance can be brought in to account by 31 December 2020 and paid for by 30 April 2021 to qualify for the enhanced allowances.
Businesses are encouraged to explore the purchase of zero carbon vehicles and, where appropriate, to consider investment in enterprise zones.
Read more on the Budget here.