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Changes to Annual Investment Allowance from 6th April 2012 and Maximising tax relief for the cost of machinery
Changes to Annual Investment Allowance from 6th April 2012 and Maximising tax relief for the cost of machinery
What is Annual Investment Allowance (AIA)?
The AIA is a form of capital allowance which offers tax relief at 100% on all qualifying expenditure on plant and machinery in the year of purchase. Currently the maximum you can deduct is £100,000. However, from 6th April 2012 this amount is being reduced to just £25,000.
There are exceptions to the plant and machinery that qualifies for AIA such as cars and plant and machinery gifted to your business.
AIA is adjusted for short or long accounting periods, and also for accounting periods that span the rates and dates of differing AIA.
31st January Self Assessment Deadline
Your Self Assessment tax return for the year ending 5th April 2011 must be filed online with HM Revenue and Customs by midnight on 31st January.
If you miss the above deadline you will be subject to the new penalties introduced by HM Revenue and Customs.
In a nutshell, ‘the longer you delay, the more you pay’. Penalties apply even if you have no tax to pay or if you pay all the tax you owe on time.
Deferred Tax
What is Deferred Tax?
Due to UK tax rules, some transactions of a business are recognised in one period for accounting purposes and another for tax purposes. These ‘Timing Differences’ can create both deferred tax assets and deferred tax liabilities For example, you may have sales which are recognised this year but you may not receive the income till next year. Technically you do not have to pay tax on the income until it is actually received. The difference between the reported amount of tax and the amount of tax due is entered in the company’s financial statements as a deferred tax liability.
The purpose of deferred tax is to ensure the tax effects of a transaction are recognised in the same period as it is for accounting purposes.
End of Paper VAT Returns
From April 2012, you will no longer be able to submit VAT Returns by paper. Instead you will be required to submit your returns to HMRC online and you will also be required to pay electronically.
National Minumum Wages Increase
From 1st October 2011 the National Minimum wage will increase. The new rates will be as follows:
£6.08 an hour for workers aged 21 and over
£4.98 an hour for workers aged 18 to 20
£3.68 an hour for workers aged 16 to 17
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Changes to Annual Investment Allowance from 6th April 2012 and Maximising tax relief for the cost of machinery
Changes to Annual Investment Allowance from 6th April 2012 and Maximising tax relief for the cost of machinery
What is Annual Investment Allowance (AIA)?
The AIA is a form of capital allowance which offers tax relief at 100% on all qualifying expenditure on plant and machinery in the year of purchase. Currently the maximum you can deduct is £100,000. However, from 6th April 2012 this amount is being reduced to just £25,000.
There are exceptions to the plant and machinery that qualifies for AIA such as cars and plant and machinery gifted to your business.
AIA is adjusted for short or long accounting periods, and also for accounting periods that span the rates and dates of differing AIA.
Self Assessment Deadline is 31st January
The deadline for filing your self assessment tax return for the year ending 05th April 2011 is the 31st January. If you do not file by this date you could face penalties.
