CIOT: AIA doubling good but brings a need to speed up repayments

CIOT: AIA doubling good but brings a need to speed up repayments

CIOT: AIA doubling good but brings a need to speed up repayments

Whatever the doubling of the Annual Investment allowance (AIA) does for investment, it is a good move on the simplification front, says the Chartered Institute of Taxation (CIOT). It does, though, mean more businesses will show a tax loss – and need repayments which HMRC will need to process quickly.

John Whiting, Tax Policy Director at the CIOT, said:

“The doubling of the allowance is a good simplification measure, as well as encouraging capital investment.

“But it will mean more businesses claiming tax loss reliefs and we just hope HMRC are gearing up to process those claims promptly. Slow tax repayments are a source of cost and frustration for many advisers and their clients.

“However, the proposal, also in the Budget, of a single online account for businesses indicates that repayments from one tax could be easily offset against amounts due on other taxes. This would be a welcome development for businesses with cash flow problems.”

Notes to Editors

1) The Chancellor plans to raise the 100% capital allowance for most plant and machinery to £100,000 a year from April. This will mean fewer complex capital allowance calculations – and less risk of errors. The change applies to both companies and unincorporated businesses.

2) The Chartered Institute of Taxation (CIOT) is a charity and the leading professional body in the United Kingdom concerned solely with taxation. The CIOT’s primary purpose is to promote education and study of the administration and practice of taxation. One of the key aims is to achieve a better, more efficient, tax system for all affected by it – taxpayers, advisers and the authorities.

The CIOT’s comments and recommendations on tax issues are made solely in order to achieve its primary purpose: it is politically neutral in its work. The CIOT will seek to draw on its members’ experience in private practice, government, commerce and industry and academia to argue and explain how public policy objectives (to the extent that these are clearly stated or can be discerned) can most effectively be achieved.

The CIOT’s 15,000 members have the practising title of ‘Chartered Tax Adviser’.

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George Crozier
External Relations Manager

D: +44 (0)20 7340 0569
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The Chartered Institute of Taxation
www.tax.org.uk