Cover 4 Fleet Insurance Examines The Annual Investment Allowance Reduction From 100,000 To 25,000

Top Quote On 1st April 2012 the British Government makes a range of budget decisions which will affect fleets. End Quote
  • (1888PressRelease) January 24, 2012 - Victoria, London - Cover 4 Fleet Insurance( ) examines one of these important cuts - the annual investment allowance reduction from 100,000 to 25,000.

    Any business who invests more than 25,000 in machinery or plant will be affected by this UK government measure. The intended objective of this measure is to re-focus the simplification and cash flow benefits which are offered on smaller business entities. It is part of the overall phased reduction in the main rate of CT (corporate tax), which aims to promote a competitive corporate tax system which should support long term economic growth and enterprise.

    In April 2008 Annual Investment Allowance (AIA) replaced the previous capital allowance system. It basically gives a one hundred per cent first-year allowance for business expenditure on all assets which can be categorised as plant and machinery, which includes commercial vehicles. This will change on April 1 2012.

    On 1st April 2012 the AIA allowance will drop to 25,000 from the previous 100,000. So instead of any vans/vehicles which fall into the category of plant and machinery, which had been acquired, being written off against tax up to 100,000, this will reduce down to 25,000.

    Once this comes into force, those businesses that do invest over 25,000 on plant and machinery will however continue to be eligible for writing down allowances, which will be 185 and 8% from April 2012.

    The OBR (Office for Budget Responsibility) assessed the impacts of these measures and they found that the cuts in corporate tax rates more than offset the investment allowance reductions. They concluded that the reform package would promote higher levels of business investment than previously would have been the case.

    However they also stated that smaller businesses would suffer from less adverse effects than larger businesses. There will be extra administrative costs for bigger businesses.

    To see the government budget update document which has more detailed information on this measure, please click on fleet budget measures 2012( ).

    About Cover 4 Fleet Insurance

    As a family business which has expanded and grown successfully over the years, Cover 4 Fleet Insurance is very competitive when it comes to commercial fleet insurance. They have a dedicated team who will work on your behalf to find the best balance between the right cover and a low cost commercial fleet insurance( ) policy.


    Press Contact:

    Jackie Bourke


    95 Wilton Road, Suite 718,


    London SW1V 1BZ

    United Kingdom

    Phone: 0207 099 6158


    E-mail: cover4fleet ( @ ) cwa-europe dot com

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