BTAX, AIA limit 2016

marcin_karpinski

Hi everyone,

What is the Annual Investment Allowance (AIA) limit in 2016?

"Business Tax, FA 2015" by Osborne Books, page 6.13 says:

"The AIA limit change from £500,000 to £25,000 occurred on 1 January 2016 for income tax payers (self-employed and partners)"

also, page 3.5:
"...£500,000 per year for CAPs ending on or before 31/12/2015. The limit is £25,000 for CAPs starting on or after 1/1/2016".

However, the HMRC website says the limit from 1 Jan 2016 is not £25,000 but £200,000:
https://www.gov.uk/capital-allowances/annual-investment-allowance
"The AIA amount
The AIA amount is £200,000. This is for 12-month periods from 1 January 2016."

My question is: what is AIA limit in 2016? Is there a mistake in Osborne BTAX textbook, or is there anything I don't understand about Annual Investment Allowance limits?


thank you
Marcin

MarieNoelle

It is now set at £200,000 from 1st jan 2016 but the initial budget had planned to revert to £25,000 before the change was announced in the Summer.
Probably the books had already been printed by then. Tax is a nightmare for publishers!

marcin_karpinski

Thank you MarieNoelle

So if during an exam I need to calculate AIA limit for 2016, should I use £25,000 or £200,000 limit?

MarieNoelle

Best you ask your tutor about this or the AAT directly.
Maybe @James_B can find out for you?

James_B

Hi, I've asked our assessment team and should get a response tomorrow. Thanks

James_B

Sorry for the delayed response, here's the answer:

Our current tax assessments are based on Finance Act 2015 and will be until 31 December 2016, so it’s £25,000 right now. You can find this and other useful information in-assessment via the Taxation data 1 pop-up – here it is in the sample (it’s the same in the live assessment and the same in every question) with AIA second top: