Annual Investment Allowance (AIA) claims within groups and between companies under common control can be complicated. HMRC are writing to corporate groups and related companies that may have exceeded the AIA limit.
Annual Investment Allowance (AIA) limits
The AIA limit has been £1m since 1 January 2019. It was previously lower at:
- £200,000: 1 January 2016 to 31 December 2018.
- £500,000: 1 April 2014 to 31 December 2015.
Where companies form a group or are Related to one another and under common control, they are only entitled to one between them.
AIA allocation complications may exist where companies have non-coterminous year ends, or where AIA limits are affected by accounting periods being longer or shorter than a year.
One-to-many letters
HMRC are writing to companies they believe are members of a group, or related to other companies, asking them to check their historic AIA claims to ensure the AIA limit has not been exceeded.
HMRC’s letter identifies the period of concern, the amount of AIA claimed by the company in question, and AIA amounts claimed by related or group companies.
If, with this information, the company identifies an error, it is advised to amend the affected tax return within 30 days. If no amendment is made, HMRC may carry out a compliance check or make a correction to the return.
Where a company believes the information that HMRC holds is incorrect, they are advised to contact HMRC by e-mail or letter.
Useful guides on this topic
Annual Investment Allowance (AIA): Related companies
What restrictions to AIA apply to companies? What does common control mean? When are companies related?
Annual Investment Allowance (AIA)
What is the Annual Investment Allowance? What are the limits? What expenditure qualifies?
AIA & WDA: Rules where there is a change of rate
How do you apply hybrid rates when there are changes in the rate of allowances? How does this work for Writing-Down Allowances (WDA) or the Annual Investment Allowance (AIA)?
Capital Allowances: What's new 2023-24
What's new in Capital Allowances for 2023 and 2024? A summary of the different types of capital allowances currently available to UK businesses.
External links
CIOT: HMRC One to Many letter – Annual investment Allowance Group Claims
