Super Deduction Scheme
New 130% first-year capital allowance for qualifying plant and machinery assets; and a 50% first-year allowance for qualifying special rate assets.
Investing in new Plant and Machinery for your business? You could cut your business tax bill by 130% of the cost of your investments.
The new scheme, announced by Chancellor of the Exchequer Rishi Sunak in his Spring Budget 2021, has been branded by some as the biggest tax cut in modern history.
From 1 April 2021 until 31 March 2023, companies investing in qualifying new plant and machinery assets will be able to claim:
- A 130% super-deduction capital allowance on qualifying plant and machinery investments a 50% first-year allowance for qualifying special rate assets
- The super-deduction will allow companies to cut their tax bill by up to 25p for every £1 they invest, ensuring the UK capital allowances regime is amongst the world’s most competitive.
- The government has offered unprecedented support for businesses during Covid. Even so, pandemic-related economic shocks and the accompanying uncertainty have chilled business investment. This super-deduction will encourage firms to invest in productivity-enhancing plant and machinery assets that will help them grow, and to make those investments now.
Example
• Business profit £200,000
• Investment in plant and machinery £50,000
• Corporate tax due at a rate of 19% £38,000
• Tax amount paid after tax break £25,650
• Total savings £12,350
Download the Super-deduction factsheet for further information.
For full eligibility details on the scheme and how to claim, click here.
If you would like to discuss how we could help you fund your new plant and machinery purchases, please contact us on the details below
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