Capital investment encouraged
In the March 2021 Budget the Chancellor announced a super-deduction scheme that provides a 130% deduction for the cost of new plant or equipment if it is purchased by a company before 1.4.23. Expenditure on other new assets such as fixtures and integral features in buildings can also qualify for a 50% first year deduction if purchased before 1.4.23.
In the March 2021 Budget the Chancellor announced a super-deduction scheme that provides a 130% deduction for the cost of new plant or equipment if it is purchased by a company before 1.4.23. Expenditure on other new assets such as fixtures and integral features in buildings can also qualify for a 50% first year deduction if purchased before 1.4.23.
There are two major restrictions to these attractive investment reliefs:
- the assets must be purchased new (not second hand); and
- the super-deductions can only be claimed by companies.
An alternative to these reliefs is the Annual Investment Allowance (AIA) where up to £1m of the cost may be relieved. This AIA cap was due to reduce to £200,000 per year from 1.1.22 but will now stay at £1m until 31.3.23.
This offers a unique window for investing in business equipment including commercial vehicles but please talk to us before agreeing the deal to check the tax implications.
