Business News - January
Accountants Welcome Capital Allowance Clarification
Chartered accountants Moore Thompson are urging businesses to use reform of the capital allowances tax regime to take expert advice on current and future spending.
The firm, which has clients across Cambridgeshire and Lincolnshire, made the call after the government published draft legislation last month to clarify proposals for a major shake-up of capital allowances - originally announced in the March 2007 Budget - which allow businesses to offset a range of expenditure against their tax bills.
Measures due to come into effect from April 2008 include:
- A new annual investment allowance (AIA) of 100 per cent relief on the first £50,000 of expenditure on plant and machinery, for all businesses
- A new integral features “pool”, attracting annual relief of 10 per cent, including heating and electrical systems, lifts and “green” measures such as external solar shading and energy-efficient lighting to make buildings more sustainable
- A cut in the tax relief rate on plant and machinery from 25 per cent to 20 per cent
- The phasing out of the four per cent industrial and agricultural buildings allowances over the next four years.
Mark Hildred, managing partner at Moore Thompson, which has offices in Spalding, Wisbech and Market Deeping, said: “These changes have the potential to create winners and losers, which underlines how vital it is for business to plan ahead for expenditure.
“This is an ideal time to seek the advice of a qualified professional, such as an accountant, to explore the most tax-efficient options under the current and future capital allowances regimes. These allowances are a valuable incentive to investment and businesses need to make the most of the tax relief opportunities available.”
