For Two Years From 1st April 2021, Any Purchases A Business Makes In Plant And Machinery Will Qualify For A 130% Capital Allowance Deduction.
How Does The Super-Deduction Work?
The new tax relief is being introduced for two years for expenditure from 1 April 2021 to 31 March 2023.
So how does it work?
If a business spends £100,000 on qualifying purchases and is eligible to claim the super-deduction tax break, then it will be able to claim 130% tax relief rather than 100%: the corporation tax deduction will be £130,000 (i.e. 130% of your purchase) rather than £100,000.
This will save an additional £5,700 in corporation tax (£30,000 x 19%).
What Purchases Qualify For Super-Deduction?
Most new purchases will qualify for the super-deduction, including, but not limited to;
- Computer equipment
- Vans & lorries
- Office equipment
The asset cannot be second hand.
If you are unsure as to whether your purchase would qualify, get in touch.
Can Anyone Claim?
Unfortunately, this is only applicable to limited companies – partnerships and individuals will not be eligible for the super-deduction.
The MDH Team Are Here To Support You
If the above will have an impact on you or your business, please book a 30-minute call with Michael or Natalie to discuss.
Join our private Facebook page for Croydon & Surrey Business Owners.
