The £1m Annual Investment Allowance is now permanent: what it means for property owners
From 1 April 2023 the Annual Investment Allowance is set permanently at £1m. For most commercial property owners, this is the relief doing the real work on a fixtures claim. Here is why.
- The AIA is fixed permanently at £1m from 1 April 2023.
- For most owners it gives 100% relief on a fixtures claim in year one.
- The £1m is shared across groups and businesses under common control.
From today, 1 April 2023, the Annual Investment Allowance is set permanently at £1m a year. The limit had spent years bouncing up and down, which made planning a guessing game. That is over. For anyone who owns commercial property, this is quietly one of the more useful bits of tax news in a while, and it is worth understanding why.
What the AIA actually does
The Annual Investment Allowance gives you 100% relief on qualifying plant and machinery in the year you spend the money, up to £1m. Spend within that limit and the full cost comes off your taxable profits at once, rather than being relieved slowly across many years. It is open to companies, sole traders and partnerships alike, which is what makes it the relief most business owners actually reach for.
Why it matters for a fixtures claim
Every commercial building is full of plant and machinery built into its fabric, the wiring and lighting, the heating and hot water, the air conditioning, the sanitaryware. Those fixtures qualify for capital allowances under the Capital Allowances Act 2001. When we identify that qualifying value in a property, it has to find a home in your tax return, and for most owners the AIA is that home.
It is the reason a fixtures claim so often lands as 100% relief in a single year rather than a slow drip. The £1m ceiling is high enough to cover the qualifying fixtures in the great majority of the buildings we look at.
The catch worth knowing
One £1m allowance is shared between companies in a group and between businesses under common control. You cannot multiply it by spreading spend across related entities. So if you run more than one business, the sharing rules need watching before you assume you have a fresh £1m to play with.
Where we come in
The value of a claim comes from finding the fixtures and evidencing every figure of it. The AIA is how that value turns into relief on your bill. We deliver a fully sourced report, and a qualified accountant reviews it and decides how the relief is used.
If you own a commercial property and have never had the fixtures looked at, it costs nothing to ask. We will tell you, straight, whether it is worth a look.