The following is intended as general information and does not constitute specific advice for your business. Before making a purchase you should speak to your accountant or tax adviser.
What is the Super Deduction?
The Super Deduction is a temporary measure which allows companies to claim 130% first year capital allowance on qualifying plant and machinery investments. This means that for every £1 spent on qualifying assets, a company can reduce its taxable profits by £1.30. This deduction is available to companies of all sizes and applies to investments in most tangible plant and machinery, including computer equipment, manufacturing equipment and commercial vehicles.
Who is eligible?
To qualify for the Super Deduction, companies must meet a few basic criteria. The investment must be made between April 1, 2021, and March 31, 2023, and the assets must be new and unused. The asset must also be kept in use by the company throughout the qualifying period, which is usually eight years. The deduction is only available to companies that pay corporation tax, and it cannot be used for assets that have been leased or rented, however Hire Purchase (HP) can be used.
There are some exclusions to the Super Deduction, including cars, assets used in a business’s residential property, and assets that have been acquired through a connected party. Additionally, the Super Deduction cannot be used in conjunction with other capital allowances, such as the Annual Investment Allowance.
When does it end?
As mentioned above, the deadline for investment is March 31 2023 so there isn’t long left to take full advantage.
We would always suggest speaking to your accountant to see if you can take advantage of this allowance but more basic info is available on the government website here.