With the 2020/21 tax year drawing to an end, it’s a good time to ensure that you are minimising your tax liabilities by maximising your reliefs…
Although we have not had an Autumn Statement this year, one welcome change was announced on 12 November in relation to tax relief on expenditure qualifying for capital allowances.
Originally the temporary limit of 100% tax relief on the first £1m of qualifying expenditure was due to end on 31 December 2020 and revert to its ‘permanent’ level of £200,000. However it is good news for business that the existing £1m qualifying level will now be extended for another year until 31 December 2021. This will hopefully assist those who are trying to invest at these challenging times and avoid them having to make difficult decisions on timing of expenditure which can be adversely impacted in a period when the annual investment allowance decreases.
This extension, along with the ability to claim structures & buildings allowances (at 3%) on a significant amount of other expenditure, will provide important tax relief to businesses.