A £1 million tax break to stimulate investment in UK manufacturing, to support business confidence, is to be extended, HM Treasury announced last week.

Businesses, including manufacturing firms, can continue to claim up to £1 million in same-year tax relief through the Annual Investment Allowance (AIA) for capital investments in plant and machinery assets until 1 January 2022. The extension of the temporary £1 million cap was originally due to revert to £200,000 on 1 January 2021.

This move is intended to boost confidence as companies look to weather the pandemic and plan for the future.

Financial Secretary to the Treasury Jesse Norman said: “It is vital that we support business through the difficult months ahead. Extending the Annual Investment Allowance’s £1 million cap will give businesses the confidence they need to invest into next year, helping them to grow while benefitting the wider economy too.”