Super-deduction: One month left

Companies only have until 31 March 2023 to claim 130% capital allowances on qualifying fixed assets.  This ‘super-deduction’ was introduced in April 2021 to encourage businesses to invest in plant and machinery following the Covid-19 pandemic.

Under the super-deduction, for every £1 that a company invests, their taxes are cut by up to 25p.

The conditions for fixed asset investments to qualify for the 130% super-deduction are:

• The expenditure must be incurred between 1 April 2021 to 31 March 2023;
• The expenditure must be incurred by a company; and
• The plant and machinery must be new and unused, not second-hand.

The relief of 130% is available on most fixed assets that would ordinarily qualify for capital allowances at the main rate of 18%.  However, cars do not qualify for the super-deduction – they are specifically excluded.

With just one month until this temporary capital allowance comes to an end, companies are encouraged to invest in new plant and machinery before the end of March 2023 in order to benefit from this enhanced relief.

If you need advice or guidance on the matter, contact the Whitings team today.

Disclaimer - All information in this post was correct at time of writing.