1 Jun 2022
This is our helpful and hopefully money-saving reminder that the super-deduction, offering 130% first-year tax relief, is available to companies until March 2023. The super-deduction is designed to help companies finance expansion in the wake of the coronavirus pandemic and to drive growth.
The super-deduction tax break was introduced on 1 April 2021 and allows businesses to deduct 130% of the cost of any qualifying purchase of most new plant and equipment that would ordinarily qualify for 18% main rate writing down allowances. This means that for every £1 incorporated businesses invest they can reduce their tax bill by up to 25p. The temporary tax relief applies on qualifying capital asset investments until 31 March 2023.
In addition, an enhanced first year allowance of 50% on qualifying special rate assets also applies expenditure within the same period. This includes most new plant and machinery investments that would ordinarily qualify for 6% special rate writing down allowances.
The super-deduction is only for companies, which means that self-employed traders are unable to benefit. However, they could benefit from the temporary increase in the Annual Investment Allowance (AIA) cap to £1 million.
Will you be one of the 56,000?
This is your last year to claim the super-deduction of 130%.
Completing P11D forms to report benefits in kind