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Maximising the claim for Capital Allowances in the tax year to 5 April 2012

With the AIA allowance being phased out after 5 April 2012 there is great incentive for farmers to maximise Capital Allowances (CAs) for the forthcoming tax year. With greater farm profits expected due to increased corn prices and a general world shortage of food, there is great tax planning potential.

Currently, taxpayers may benefit from £100,000 of Annual Investment Allowances (AIAs) at the rate of 100%, so that clients could potentially accelerate the relief from Integral Features Allowances (IFAs) to AIAs up to this capped level, which should be sufficient for most envisaged projects. The cap is also due to reduce to £25,000 at the rate of 100% from 6 April 2012.

Guidance says that your clients can claim capital allowances on the cost of building work that’s needed to install plant and machinery on their premises. This can include anything from toilet cubicles, concrete ramps, tiling or other splash backs to sinks, toilets etc, and the claim can be for work performed during the four previous tax years.