“Super – Deduction” Capital Allowances

Now is the time to start investing in your business

What’s going on?

In a bid to encourage investment and capital expenditure the chancellor announced during the 2021 Spring budget a welcome tax break for companies investing in qualifying plant & machinery.

In a nutshell, between 1st of April 2021 and 31st March 2023 companies are able to claim a 130% deduction for most new plant & machinery (excluding cars) against their taxable profit.

Currently relief for capital expenditure is generally received via the annual investment allowance (AIA) which provides a 100% deduction for qualifying expenditure of up to £1m per annum with an 18% writing down allowance being claimed on the balance.

What is qualifying expenditure?

As a general rule if the AIA could have been claimed on the expenditure, then the super deduction can apply however one restriction is that second hand asset purchases do not apply. A further restriction will be against spend that was committed prior to the announcement date of March 3rd 2021.

Get in touch!

As with all these initiatives there are several rules to be aware of to ensure compliance. If we can assist in untangling some of the details behind the “Super Deduction” please feel free to get in touch for some professional advice.
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