Times almost up for the Super Deduction Tax Allowance
The government’s “Super Deduction” tax incentive ends on 31st March 2023 so time is running out for Limited Companies to take advantage of the relief.
Using the Super Deduction, companies can claim 130% capital allowances on qualifying plant and machinery investments. This means that for every £1 spend on qualifying plant and machinery, a company can reduce its taxable profit by £1.30.
There isn't a full list of plant and machinery assets that qualify for the Super Deduction however the kinds of assets which may qualify for either the super-deduction or the 50% FYA include;
- Solar panels
- Computer equipment and servers
- Tractors, lorries, vans
- Ladders, drills, cranes
- Machinery and tools
- Office chairs and desks
- Electric vehicle charge points
A key point to note with the Super Deduction however, is that it only applies to assets Bought New. That means that anything bought second hand or refurbished so that it is 'like new', doesn't qualify for the relief.
The Super Deduction, like the Annual Investment Allowance, also doesn't apply to Company Cars.
Limited Companies should review their investment decisions now to see if bringing forward purchases makes sense in order to benefit from this relief. It could be a great opportunity to invest in new equipment and save more money in taxes.
HMRC Factsheet: Super-Deduction Factsheet
HMRC Guidance: Super-Deduction Guidance
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