By Niamh Tracey | 5 January, 2023

130% Super Deduction Capital Allowances End on 31st March 2023 – Act Fast!

Super Deduction Capital Allowances End on 31st March 2023

Capital allowance super deduction is a temporary tax relief measure introduced in the United Kingdom as part of the Government’s efforts to stimulate economic recovery from the COVID-19 pandemic. It allows companies to claim an additional 130% capital allowance on their investments in new plant and machinery made between 1st April 2021 and 31st March 2023. This means that for every £1 a company invests in eligible assets during this period, it can claim a tax deduction of £1.30. 

The super deduction is a welcome relief for companies as it allows them to reduce their tax bill even further when investing in new equipment and machinery to improve efficiency and competitiveness. It is also a boost for the economy as it encourages businesses to invest and create jobs. 

However, it is important to note that the capital allowance super deduction is a temporary measure and will only be available until 31st March 2023. After that, the standard capital allowance of 100% will apply to all qualifying investments. 

Companies planning to take advantage of the super deduction should act fast and make their investments before the deadline to ensure they can claim the additional relief. 

It is also worth noting that there are certain rules and restrictions on the type of assets that qualify for the super deduction. 

Plant and machinery refer to a wide range of assets used in a business, including equipment, tools, and other items used to carry out the business’s activities. Examples of plant and machinery include: 

  • Manufacturing equipment, such as machine tools and assembly line machinery 
  • Agricultural machinery, such as tractors and harvesters 
  • Office equipment, such as computers and printers 
  • Medical and dental equipment 
  • Vehicles, such as lorries and vans 

To qualify for the super deduction, the assets must be new and must be used for business purposes. The super deduction is not available for investments in second-hand assets or assets that are used for personal purposes. 

It is worth noting that there are certain exclusions and restrictions on the types of assets that qualify for the super deduction. For example, certain types of land and buildings are not eligible for the relief. It is advisable to seek professional advice to ensure that the investments meet the eligibility criteria so please do get in touch for any clarification that you require. 

In conclusion, the capital allowance super deduction is a valuable tax relief measure that has provided a much-needed boost to companies in the UK. However, it is important to be aware that it was only intended as a temporary measure and it will end on 31st March 2023. Companies planning to take advantage of the super deduction should act quickly in the first quarter of 2023 to ensure they can claim the additional relief before the 31st of March deadline. 

If you would like to discuss with us in further detail, please do not hesitate to get in touch at 01522 537575 or enquiries@saulfairholm.co.uk.