Does the #Budget2018 mean now is the time to invest in your Business?

November 5, 20180
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The Government announced during yesterdays budget that they will temporarily increase the Annual Investment Allowance for two years from the current level of £200,000 to £1 Million for qualifying expenditure incurred from 1st January 2019.

This measure is designed to stimulate business investment in the economy by providing an increased incentive for businesses to invest in plant or machinery.

Who is likely to be affected?

Businesses investing more than £200,000 in plant and machinery from January 2019.

But is it the right time to invest in your Business?

Spending money on an asset that isn’t likely to improve your Businesses productivity or profitability purely to make tax savings won’t make much sense unless you can put the Assets to good work over the longer term. You should also be confident that you have a strong enough cash flow within your business to the commit the necessary cash to your purchase either in a lump sum, or over a period of years on an Asset Finance agreement.

The Chancellor has been under pressure from Business Groups for some time to raise the Annual Investment Allowance once more. By announcing a temporary increase to £1M from 1st January 2019 the plan is to provide an incentive to Businesses already investing in Plant or Equipment up to the £200,000 threshold to bring forward their spending plans or indeed to invest in further equipment during the coming year.

Many businesses will need to spread the cost of purchasing new assets.

There are very few Businesses that will have enough cash sat in their Bank Accounts to make the most of this raised Annual Investment Allowance. Many Businesses who invest regularly in Plant and Equipment will chose to spread the cost of their purchases over the useful lifespan of the asset they are purchasing.

Whether you are considering purchasing your Asset outright, or spreading the cost of your purchase by means of an Asset Finance Hire Purchase Agreement, there is always some useful information to be had on the different types of finance available within the Business Finance Guide published by the British Business Bank.

Anyone considering investing in Business Assets should always check ahead of any purchase with their Accountant and professional advisers to ensure they are clear which assets are covered by this scheme, and which types of finance are eligible. The Government’s own website is always a good place to start for information relating to this scheme and a link is provided below.

>> Temporary Increase in the Annual Investment Allowance <<

We are here if you need us

If you are considering investing in a new piece of plant or equipment and would like some help with your financing, we are always available at the end of a phone to assist and would be delighted to speak with you. We work with a wide panel of lenders, and have access to some of the best rates in the market making sure you receive a competitive deal.

Please see our website via the link below or give us a call on 01229 588077

Email at finance@jfhornby.com


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