From April 2012 the Annual Investment Allowance (AIA), which gives 100% relief for qualifying plant and machinery, reduces from £100,000 to £25,000 per annum.
If employers use individuals they regard as self-employed, but this is subsequently challenged by HM Revenue and Customs, there may be significant financial consequences, i.e. the “employer” will be pursued for any PAYE that should have been deducted from the payments made to the “employee”. This may also apply in certain circumstances where agency workers are engaged.
A business that incurs expenditure on plant or machinery can elect to have it treated as a short life asset (SLA).
The Finance Act 2011 enables businesses incurring expenditure on an item of plant or machinery from 1 April 2011 (6 April 2011 for unincorporated businesses) to make a short life asset election, in respect of that item, if they expect to sell or scrap it within an eight year cut-off period. This is an extension from the current four year period.
