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With over five decades’ experience serving a diverse range of clients in the South West, we possess an unbeatable depth of knowledge across a wide range of industry sectors.
Our specialist partners and teams can provide expert advice on everything from farming and agriculture, to military tax allowances. We’re here to help you make the most of your planning opportunities so that you can grow with confidence.
Getting the maximum tax benefit from capital spending often involves a balance of considerations and timing. We look at two timing issues that could impact your business.
Last-Chance Opportunity to Use Covid-19 Extended Loss Carry Back Rules
Strategically timed capital expenditure now, in tandem with the extended loss carry back rules, may have the potential to create or enhance a trading loss, generating a tax refund for your business. Current rules provide particular incentives for capital spending. The temporary higher level of Annual Investment Allowance (AIA) is available to both companies and unincorporated businesses, whilst the 130% super-deduction and 50% special rate allowance are available to companies.
The extended loss carry back rules apply to trading losses made by companies in accounting periods ending between 1 April 2020 and 31 March 2022. For unincorporated businesses, it’s available for trading losses made in the tax years 2020/21 and 2021/22.
Reprieve For the Temporary Higher AIA Limit
The AIA limit increased to £1 million from January 2019 and is set to remain in place until 31 March 2023.
If planning major capital expenditure, it’s worth taking stock now of when the expenditure would be best made. The accounting year end is a key component in any decision here.
We recommend an early discussion to make sure that the timing of your purchase allows you to maximise the tax benefits available. Complex transitional calculations will be needed when the super-deduction comes to an end and when the AIA drops back to it’s original level.
We can help you decide if it would benefit your business to accelerate capital spending to bring it inside the relevant extended loss carry back window.