Under the super-deduction tax, for every £1 a company invests, their taxes are cut by up to 25p.
This capital allowance measure offers 130% first-year relief on qualifying main rate plant and machinery investments until 31st March 2023.
So as an example, if a company spends £100,000 on qualifying assets and deducts £130,000 using the super-deduction in year 1. That will result in a tax saving of £24,700!
What is considered plant or machinery?
Most tangible capital assets used in the course of a business are considered plant and machinery for the purposes of claiming capital allowances. There is not an exhaustive list of plant and machinery assets. The kinds of assets which may qualify for either the super-deduction or the 50% FYA include, but are not limited to:
- Forklift trucks
- Plant equipment
- Solar panels
- Computer equipment and servers
- Tractors, lorries, vans
- Ladders, drills, cranes
- Office chairs and desks
- Electric vehicle charge points
- Refrigeration units
- Foundry equipment
More detail on the eligibility of different types of investments for different types of capital allowances is set out in the table on the HM Treasury PDF; click here to download.
For more details on the 130% Tax Super-Deduction or to arrange a FREE Site Survey please contact our team here, we would be happy to help.