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10-fold increase to Investment Allowance could save compressed air users a fortune

Thursday 13th March 2014

In a bid to stimulate investment in energy-efficient plant and machinery the Annual Investment Allowance has risen 10-fold, from £25,000 to £250,000, and is available until 1st January 2015. This capital allowance has been designed to cover the total annual investment undertaken by 99% of all the SME businesses in Britain.

Businesses can now claim 100% tax relief on capital investments on qualifying plant & machinery which offers a huge cash flow advantage over standard allowances by reducing taxable profits and thus the amount of tax to be paid. Technology that increases compressed air system efficiency is always a sound investment: Compressed air systems use more than 10% of industrial energy, yet typically 30-40% of this compressed air is wasted due to inefficient generation and distribution.

However, by using the latest variable speed drives and modern compressor controllers to reduce energy consumption, businesses can benefit from fast payback that more than justifies the initial outlay. As the UK's biggest independent distributor of pneumatic products and process systems Thorite can not only provide the best advice on the most suitable and energy-efficient compressed air generation machinery, but also guide customers through the benefits brought by the new Annual Investment Allowance.

Speaking of the new scheme Thorite's Steve Boults said: "Basically, this is brilliant news for British business and there’s never been a better time to invest in compressed air energy savings. With tax relief available on capital allowances and Enhanced Capital Allowances, plus the on-going savings from energy efficiency, the return on investment will prove very attractive to even the most cautious of finance directors, by saving energy, cash and emissions."

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