Investment allowance lifted from £200,000 to £1m to boost business
The investment allowance will be increased from £200,000 to £1m to stimulate business investment, the chancellor Philip Hammond announced today in his budget speech.
"I am increasing the annual investment allowance, from £200,000 to £1m for two years," Hammond said.
The investment allowance lets a business deduct qualifying capital expenditure from its taxable profits to spend on business equipment such as machinery and tools.
The lifting of the allowance from January 2019 was announced as part of a package of measures aimed at boosting businesses including targeted relief for acquiring intellectual property-rich businesses, export help through direct lending and passport gates for citizens of the US, New Zealand, Japan and Canada.
Carolyn Fairbairn, director-general of business lobby group the CBI, said:“The chancellor has come up trumps with a bumper package to spur firms to invest more into their factories and machinery, with the improved annual investment allowance and incentives for spending on buildings.
Chancellor: I am increasing the Annual Investment Allowance to £1m for two years, delivering on a longstanding ask of @BritishChambers #Budget2018 pic.twitter.com/fHCNe1rhEU
— HM Treasury (@hmtreasury) October 29, 2018
He also announced an additional £200m for the British Business Bank to replace the European Investment Bank if it is needed as well as the extension of access to the financial ombudsman to larger small and medium enterprises.