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Tax reliefs referred to are those applying under current legislation which may change. The availability and value of any tax reliefs will depend on your individual circumstances. Only companies who pay corporation tax can take advantage of the super-deduction tax incentive.
To help stimulate business investment and promote economic growth and recovery from the pandemic, in the 2021 Spring Budget, the Chancellor announced the introduction of temporarily increased tax reliefs for the purchase of qualifying assets.
From 1 April 2021 until 31 March 2023, companies investing in qualifying new plant and machinery assets will be able to offset against taxable profits:
The super-deduction will allow companies to cut their tax bill by up to 25p for every £1 they invest. This provides significantly faster tax relief for qualifying investments, helping businesses to invest and grow.
Only companies who pay corporation tax can take advantage of this tax incentive. However, sole traders and partnerships can look to still take advantage of the Annual Investment Allowance which is currently set at £1 million and is in place until 31 March 2023.
Expenditure must be on new and unused plant and machinery and expenditure needs to be incurred on or after 1 April 2021, but before 1 April 2023. Assets can be funded via Hire Purchase finance, but cannot be leased.
Most tangible capital assets used in the course of a business are considered plant and machinery for the purposes of claiming capital allowances. There is not an exhaustive list of plant and machinery assets, eligible assets he kinds of assets which may qualify for either the super-deduction or the 50% FYA include, but are not limited to:
Vans, Lorries, Trailers
Cranes, diggers, excavators
Production equipment, robotic arms
Tractors, combine harvesters, crop sprayers
Computer Equipment and Servers
Electrics vehicle charging points
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The super-deduction is designed to help businesses increase their business investment in productive assets, creating the most competitive capital allowances regime in the OECD.
To learn more visit the government website on new Tax relief from 1st April 2021
For specific tax advice, please speak to your accountant.