Take advantage of investment allowances

By Rick Pendrous

- Last updated on GMT

Allison: 'You could automate several of your packaging lines'
Allison: 'You could automate several of your packaging lines'

Related tags Finance

Manufacturers should take advantage of their annual investment allowance (AIA)  – which changed with effect from the beginning of this year – to invest in new capital equipment to add value to their businesses while raising production efficiency, the boss of a packaging equipment supplier has argued.

With effect from January 1 2016, the AIA fell from an interim allowance of £500,000 to the highest permanent AIA ever of £200,000. Md of Pacepacker Services Dennis Allison advised that firms should use this allowance to invest in new business assets.

“When the chancellor announced that he was capping the AIA at £200,000 in his 2015 autumn statement, medium-sized companies operating in manufacturing and agriculture, two sectors that Pacepacker specialises in, breathed a sigh of relief,”​ said Allison. “There had been speculation that it would revert to £25,000, so settling on a year-on-year tax relief allowance of £200,000 is a considerable boost to long-term investment.”


According to Allison the question is, if you decide to reduce your taxable profits by using this capital expenditure allowance, where should it go?. This will depend on the company and the application, he added. “However, you could automate several of your bagging and packing lines and still have change!”

“For any customer considering purchasing new packing equipment, our advice would always be that they speak to their accountant or financial adviser so that they can make an informed investment decision,”​ said Allison. “It’s also advisable when holding these conversations to look into regional grants and incentives.”

Equipment payback

To help its customers build an accurate picture of equipment payback, Pacepacker has also developed a new calculator tool.

This tool makes use of a range of data from the previous financial year. It factors in, among others, the number of shifts a facility runs; the number of workers and agency staff employed; and holidays and sick days taken by the workforce.

It enables users to calculate the payback period based upon a specific project value and the types of robotic solutions that could be deployed.

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