{"id":3066,"date":"2017-06-29T00:00:00","date_gmt":"2017-06-29T00:00:00","guid":{"rendered":"https:\/\/hebblethwaites.com\/index.php\/investing-in-your-business-is-still-tax-effective\/"},"modified":"2017-06-29T00:00:00","modified_gmt":"2017-06-29T00:00:00","slug":"investing-in-your-business-is-still-tax-effective","status":"publish","type":"post","link":"https:\/\/hebblethwaites.com\/index.php\/investing-in-your-business-is-still-tax-effective\/","title":{"rendered":"Investing in your business is still tax effective"},"content":{"rendered":"<p>If you crunch the numbers, and decide that investing in new technology, a new van, or other equipment will make a positive difference to your bottom line profits, and in a reasonable time-frame, the next question to ask is &ndash; what difference will the initial purchase make to your tax bill?<\/p>\n<p>As long as the asset you are buying qualifies, the maximum write off is provided by the Annual Investment Allowance (AIA). Currently, you would be allowed to write off 100% of your assets purchases up to a value of &pound;200,000 against your taxable profits for the accounting year during which you make the investment.<\/p>\n<p>Assets that are specifically excluded from the AIA are:<\/p>\n<ul>\n<li>cars<\/li>\n<li>items you owned for another reason before you started using them in your business<\/li>\n<li>items given to you or your business<\/li>\n<\/ul>\n<p>Also, you cannot claim the AIA in a final period of trading.<\/p>\n<p>This allowance is particularly useful for self-employed business owners who may be paying income tax at the higher 40% or 45% rates. A qualifying investment of &pound;200,000 would reduce their self-employed income tax bill by a significant amount.<\/p>\n<p>For example, a self-employed sole trader, James, with profits of &pound;220,000 and investing in qualifying plant of &pound;200,000 during 2017-18, would see their income tax bill reduce from &pound;85,200 to &pound;1,700.<\/p>\n<p>In addition to the income tax savings, James&rsquo;s graduated Class 4 NIC payment would also reduce, from &pound;6,963.44 to just &pound;1,213.44.<\/p>\n<p>The AIA is a generous allowance and whilst it is inadvisable to let the tax tail wag the dog, if there is a strong indication that a proposed investment will make a difference to your business, then the tax incentive is a useful bonus.<\/p>\n<p>Finally, as with all tax planning, taking a hard look at the figures prior to any firm commitment to invest is paramount. Please call if you are planning an acquisition in the near future &ndash; essential if you want to get your tax ducks all in a row.<\/p>\n<!-- -->","protected":false},"excerpt":{"rendered":"<p>If you crunch the numbers, and decide that investing in new technology, a new van, or other equipment will make a positive difference to your bottom line profits, and in a reasonable time-frame, the next question to ask is &ndash; what difference will the initial purchase make to your tax bill? As long as the [&hellip;]<\/p>\n","protected":false},"author":0,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_links_to":"","_links_to_target":""},"categories":[1],"tags":[],"class_list":["post-3066","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/hebblethwaites.com\/index.php\/wp-json\/wp\/v2\/posts\/3066","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/hebblethwaites.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/hebblethwaites.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/hebblethwaites.com\/index.php\/wp-json\/wp\/v2\/comments?post=3066"}],"version-history":[{"count":0,"href":"https:\/\/hebblethwaites.com\/index.php\/wp-json\/wp\/v2\/posts\/3066\/revisions"}],"wp:attachment":[{"href":"https:\/\/hebblethwaites.com\/index.php\/wp-json\/wp\/v2\/media?parent=3066"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/hebblethwaites.com\/index.php\/wp-json\/wp\/v2\/categories?post=3066"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/hebblethwaites.com\/index.php\/wp-json\/wp\/v2\/tags?post=3066"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}