Commons Sense

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- Sitting 1

22 April 2021

Proposing MP
Jesse Norman Con
Hereford and South Herefordshire
Type
Public Bill Committee

At a Glance

Issue Summary

The statement discusses the extension of the increased annual investment allowance (AIA) from £1 million until December 31, 2021.

Action Requested

The clause aims to extend the AIA temporarily until December 31, 2021, providing businesses with more up-front support and encouraging them to bring forward investments. The statement also addresses an amendment seeking to change arrangements managing the transition from one level of AIA to another and urges the Committee to reject it.

Key Facts

  • The annual investment allowance (AIA) provides 100% same-year tax relief on qualifying plant and machinery investments up to £1 million annually.
  • The higher AIA cap was forecasted to have 24.9 million claims in 2019-20, compared with 18 million when the cap was last at £200,000.
  • Chris Sanger from EY said that this measure will be particularly helpful for UK manufacturing as business confidence returns due to vaccine announcements.
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