Introduction
This briefing note provides guidance on the computational
aspects of the annual investment allowance (AIA) during periods
where the limit of expenditure to which it applies changes. The
limits are time apportioned around the dates of change, with
transitional rules operating in some circumstances to prevent an
unused allowance from before the date of change being used for
expenditure incurred after the date of change. This briefing note
covers the changes introduced by Finance Act 2011 and Finance Bill
2013.
In short, the detailed changes to AIA amounts cause
computational complexity; reflecting that complexity in this note
is unavoidable.
The annual investment allowance (IA) was introduced in Finance
Act 2008 for qualifying expenditure incurred on or after 1 April
2008 for corporation tax purposes and 6 April 2008 for income tax
purposes. It provides for a 100% allowance for expenditure within a
set limit. This was initially £50,000 but was
