From now until 31st March 2023, a first year “Super Deduction” allowance of 130% is given to companies (not sole traders or partnerships) who incur capital expenditure on new and unused qualifying plant & machinery.
As an example, £10,000 of qualifying expenditure will be worth £13,000 for Corporation Tax purposes, and the effective Corporation Tax savings is £13,000 @ 19% = £2,470. Please be aware that if this plant is subsequently sold before 31st March 2023, some of the 130% allowance will be clawed back.
This allowance is only available to companies.
The following expenditure will not qualify:
There are a lot of restrictions and tax-planning scenarios relating to this allowance. If you are thinking of spending any money on plant and machinery equipment prior to 31st March 2023, please call us to discuss beforehand.