The annual investment allowance has been given an extension of 12 months and a boost in the UK budget. It now allows a tax free investment by businesses of up to £500,000 (595,000) starting in April 2014.
The scheme, which was due to close at the end of the year, has now been extended to the end of 2015 and has had the allowance doubled from £250,000.
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George Osborne, UK Chancellor of the Exchequer, said the extension had been something many business leaders had asked him to do, and he was pleased to say that he would do that and more in the budget.
The cost of the allowance to the UK tax payer will be £2bn in the short term.
Carl D’Ammassa, managing director, Aldermore Asset Finance said: "Today’s announcement to double the annual investment allowance for UK businesses provides much needed support for the five million SMEs across the country.
"We have seen a number of changes to the allowance in recent years so this extension period provides some favourable conditions to boost investment in UK SMEs.
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By GlobalData"The increase will allow businesses to bring forward investment plans and take advantage of the tax break."
