Super-Deduction of 130% on Plant & Equipment Purchases Ending Soon

Posted on 13th March 2023 by Dominique Childs

There is still time to benefit from the super deduction… amongst the UK’s strongest tax incentive for business investment to date.

Super Deduction?

The super deduction is a capital allowance that allows a company to claim 130% capital allowances on qualifying plant and machinery investments between 1 April 2021 and 31 March 2023, this is done when completing the company’s tax return.

The super-deduction is not available to unincorporated businesses and is not available on the purchase of second hand assets.

Why and when was the super deduction introduced?

Between October 2019 to September 2020, business investment in the UK had fallen by 11.6% as a direct result to the global Covid-19 pandemic.  As such the UK government responded with an aggressive tax incentive for business investment within the release of the Finance Act 2021, being the super deduction.

What can you claim the super deduction on?

Plant and machinery bought from new and used for the company’s trade, this includes but is not limited to:

• Machines such as computers or printers
• Office equipment such as desks and chairs
• Vehicles such as vans, lorries and tractors (not cars)
• Warehousing equipment such as forklift trucks
• Tools such as drills
• Construction equipment such as bulldozers or excavators
• Some fixtures such as kitchen and bathroom fittings

Finally…

This is a very broad summary to a complex tax incentive, if you would like to discuss how this may benefit your business whether you are an existing or new client, please get in touch.

Sources:

Link:https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/967202/Super_deduction_factsheet.pdf

Link: https://www.gov.uk/guidance/check-if-you-can-claim-super-deduction-or-special-rate-first-year-allowances

This material has been prepared for informational guidance purposes only.  Whilst every effort has been made to ensure the contents are accurate, information contained may not be comprehensive.  Furthermore it is not intended to provide, and should not be relied on for, tax or accounting advice.  Steven Burton & Co Limited can not accept any liability for any errors or omission or for any person acting on or refraining from acting on the information provided.  Steven Burton & Co Limited are not financial advisors and are not regulated by the Financial Conduct Authority (FCA), we can not give financial advice.