Firms in the construction and agricultural sectors aremissing out on up to 250,000 worth of tax relief because they are unaware of howmuch they are entitled to claim against newly-purchased machines, a surveycarried out by JCB has revealed.
Out of atotal of 250 businesses surveyed, only five (two per cent) correctly answeredthat they could claim back up to a quarter of a million pounds through theGovernments Annual Investment Allowance (AIA) scheme.
Businessesinvesting in plant, machinery or commercial vehicles have been entitled toclaim AIA since legislation was introduced in 2008. But in the ChancellorsAutumn Statement of 2012, the AIA was raised from 25,000 to 250,000 butonly for a temporary period of two years starting from January 1, 2013.
PaulJennings, Managing Director at JCB Finance, said: Businesses of all sizes areeligible for the AIA but many are simply missing out. For companies whosefinancial year ended in December 2013 thedeadline to claim the first tranche of AIA has already disappeared.Unfortunately any unspent allowances cant be carried forward so for some250,000 in tax relief may already have been lost.
Paul added:The countdown has also begun for those companies with a 31st March2014 year end, or unincorporated businesses with a tax year ending 5thApril 2014. Thats because after these dates the available AIA drops to187,500 before finally reverting to 25,000 on 1st January 2015.Other companies with different financial year ends will have differing amountsremaining but all need to review their spending plans before it is too late.
Unfortunatelyour survey shows that there still seems to be confusion in the construction and agricultural sectors over the size and eligibility ofthe available tax relief. It seems that some financial advisors have been slowin coming to terms with the new rules and some tax-saving opportunities havealready been lost. Additionally, there seems to be confusion in the plant hiresector with many businesses being wrongly advised that they are not eligiblefor the AIA. The best action to take isstill to seek immediate advice from a professional financial advisor
JCBssurvey demonstrated that although more than half (53 per cent) of peopleanswered yes when asked if they had heard of the Annual InvestmentAllowance, only two per cent could give the correct monetary value of theallowance. Around a third incorrectly answered that it currently standsat 25,000 while 47 per cent gave 50,000 as their answer. For full details ofthe AIA visit www.jcb-finance.com/AIA