Furthermore, they may have been anticipating significant increases in their tax bills for future tax years, following the reduction. It was therefore welcome news at the recent budget that the allowance would remain at £1m until March 31, 2023.

Why is this such good news? The Annual Investment Allowance gives 100 per cent tax relief on qualifying expenditure in plant and machinery and integral features, meaning the cost of the assets purchased in the year can be deducted in full from the taxable profit.

This provides an incentive to invest where it is necessary - to improve business function and ensure assets are efficient and up to date with latest technologies and developments - while also reducing the profits of the business subject to tax.

Bethany Thomas is Accounts Senior at WR Partners.