Unless there is a further extension to the temporarily increased annual investment allowance, the transitional provisions will apply to any chargeable period which straddles 1 April 2023. We examine the impact on unincorporated businesses
The annual investment allowance (AIA) has been with us for 14 years, helpfully blurring the tax significance for many taxpayers of whether expenditure is capital or revenue. In the last nine years, however, the AIA’s more affluent cousin, the temporarily increased AIA, has usurped the AIA’s position as the really useful capital allowance. In 87 of the 123 months between 1 January 2013 (when the temporarily increased AIA arrived) and 31 March 2023 (when it is next scheduled to depart), the temporarily increased AIA will have held sway, although the levels of both allowances have varied in that period (see Table A).