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.

From:
HM Revenue & Customs
Published
28 May 2025

Documents

Annual Investment Allowance Efficacy Review

Ref: HM Revenue and Customs (HMRC) Research Report 778

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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. 

Updates to this page

Published 28 May 2025

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