Festive tax tips

As the countdown to Christmas begins, RSM Tenon brings you its own special Festive Tax Tips.

Between now and Christmas there will be a selection of our favourite tax tips from 2012 which we hope will be of interest to you, either personally or in your business.

Tax Tip 1: Capital Allowances: Annual Investment Allowance

If you are in business, you can claim capital allowances on the purchase of qualifying items of plant and machinery (including commercial vehicles).

Currently, subject to certain qualifying conditions, you can obtain full tax relief on such plant purchases up to the value of £25,000, under a claim for Annual Investment Allowance.

However, from 1 January 2013, the £25,000 limit has been raised to £250,000 for a period of 2 years. This means up to £250,000 can be deducted from your taxable profits (this will be time apportioned if your accounting period straddles 31 December 2012).

Businesses should therefore consider carefully delaying the timing of any new purchases of plant and machinery to maximise their tax relief. We recommend that you speak to your usual tax adviser when considering delaying any capital expenditure.