In January 2013 the Annual Investment Allowance (AIA) was increased from £25,000 to £250,000 for a fixed 2 year period. George Osborne has today announced that he intends to extend this term to cover 2015 and increase the limit to £500,000.
The AIA allows businesses to purchase qualifying assets which can potentially be deducted in full against taxable profits in the year of purchase.
This means that following the purchase of an asset, the businesses next tax demand could be substantially reduced providing a significant cash flow benefit.
CEO of Close Brothers Asset Finance Mike Randall said: "This is really positive news. The AIA is an incentive to invest in capital equipment which will support any expansion plans and help stimulate the UK economy. This initiative will provide a significant benefit to a business and its cash flow.
"Our advice would be to work with a specialist finance company that understands your market and can recommend the most suitable type of finance for you."