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Act Now! Super-deduction – a very attractive £25m tax break on capex investment

Super-deduction, a new capital investment allowance, has been introduced to boost business investment and help economic recovery. It is a great incentive to encourage businesses to invest in plant and machinery and there are very few exclusions on what can be purchased. Available for two years from April 2021, the 130% capital allowance deduction will deliver 25p off company tax bills for every £1 of qualifying spend.

Start planning for super-deduction now!

If your business is looking to invest in plant or machinery, then considering the limited lifespan of the incentive and the time it takes to complete such a purchase, it is worth starting to plan for this expenditure now. Businesses can invest using profits or finance, such as through hire-purchase arrangements, as long as payments are actually made and there is the expectation that the legal ownership of the asset will pass to the lessee.

Keep good records of your plans and actual expenditure and be aware that if the asset experiences an uplift in value and you dispose of it before the end of the regime, it may cost you more in tax than you receive as a deduction. We can help you track the asset value and help mitigate any potential losses.

What equipment can I claim super-deduction against?

The kind of assets that qualify for the super-deduction include but are not limited to:

  • Office chairs and desks
  • Electric vehicle charge points
  • Solar panels
  • Computer equipment and servers
  • Tractors, lorries, vans
  • Ladders, drills, cranes
  • Refrigeration units
  • Compressors

For more information about Super-Deduction, there is information available online on the Government website or please feel free to contact the team on 01992 444466 if you have any questions and we’ll be happy to share our advice.

If you would like to see information on the latest tax rates – click here

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The information contained above is for general guidance purposes only. Whilst every effort has been made to ensure the contents are accurate, please note that each individual has different circumstances and it is essential that you seek appropriate professional advice before you act on any of the information contained herein. HB Accountants can accept no liability for any errors or omission or for any person acting on or refraining from acting on the information provided in the above

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