Due to the economic downturn caused by the pandemic, the Government has announced that it is to extend the temporary tax break for businesses investing in equipment.

The Annual Investment Allowance (AIA) limit, which was due to revert to £200,000 with effect from 1 January 2021, will remain at £1million for another year.

The change of policy means that businesses can continue (until 1 January 2022) to claim a tax deduction for the accounting period in which they purchase qualifying plant and machinery, up to the £1 million cap.