Small businesses owners are being urged with caution as a possible £300,000 worth of business tax relief comes to an end this December.

The Annual Investment Allowance scheme, worth a possible £300,000 to businesses, comes to an end in December, as announced by the Chancellor George Osborne earlier in the year.

The Chancellor George Osborne announced in the Summer Budget that Annual Investment Allowance would be cut to £200,000 from £500,000. Businesses with a year end in the last quarter still have the full £500,000 allowance but, depending on the timing of your expenditure, this could fall straight back to £200,000 when the bells ring in the New Year.

“If you haven’t been planning for this since the Summer Budget, however, don’t panic buy. There will still be £200,000 worth of annual tax relief available in the years ahead and disrupting your cash flow might have repercussions for the business further down the road,” says Mike Chapman, senior manager for corporate tax at Sussex UK200 accountancy firm Knill James.

“Any tax break that provides a 100% tax deduction for your business in year one should have been central to your business planning all year round.”

Knill James said that businesses can "by all means look at the deals on offer, and expectations of where interest rates may go will probably come into your reckoning, but allowing the tax tail to wag the commercial dog could compromise other areas of the business".