Research and analysis
Annual Investment Allowance Efficacy Review
HM Revenue and Customs commissioned IFF to conduct a qualitative evaluation of the Annual Investment Allowance tax relief, sometimes known as AIA in 2018.
Documents
Details
The Annual Investment Allowance (AIA) is a relief that can be claimed by businesses on the cost of plant and machinery. In 2018, a business could claim up to 100% of an investment up to a value of £200,000 to help reduce the potential tax liability for that business.
The 2018 research aimed to:
- gather evidence on the efficacy of the AIA
- the extent to which it is considered when investments are made
- whether or not it is meeting its aims of increasing investment and simplifying tax affairs for SMEs
IFF conducted 21 in-depth interviews with 16 claimants of AIA from the 2015 to 2016 tax year, 3 non-claimants, and 2 ‘non-informed’ claimants to explore the reasons for not claiming AIA and any differences in their investment behaviour.