UK and International Tax news
Annual Investment Allowances and Groups
Monday 26th February 2024
HMRC has recently started to enquire into claims for annual investment allowances made by groups of companies.
The annual investment allowance is subject to an annual cap of £1m since January 2019 for each annual accounting period. Where AIA claimant company is part of a group, or related to another or controlled by the same person, they are only entitled to claim the maximum AIA amount between them. If the claimant’s accounting period is longer or shorter than a year, this may affect the limit of the AIA that can be claimed.
HMRC’s enquiry letter asks the recipient AIA claimant company to check if their claim is accurate or, where their allowance is shared with multiple companies, if it has been exceeded.
Where mistakes are identified, HMRC advise that they are should be corrected by way of an amended return within 30 days of receipt of their letter. Where no action is taken, HMRC may carry out a compliance check or make a correction to the return.
For further information on entitlement to and claims for capital allowances including annual investment allowances, please contact Keith Rushen on 0207 486 2378.
Contact Us