Aia
Glossary
AIA
The Annual Investment Allowance (AIA) is the UK's most-used capital allowance, giving a 100% first-year deduction on most plant and machinery purchases up to £1 million per accounting period.
AIA can be claimed by sole traders, partnerships, and companies. It covers most equipment used in the business — computers, vehicles other than cars, machinery, fixtures and fittings — but not buildings or "long-life assets" over a separate threshold. If a single accounting period straddles a change in the AIA limit, the limit is time-apportioned. Most SMEs never hit the £1m ceiling, making AIA effectively a 100% deduction for almost all equipment spend.
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