Make the most of the Super Deduction Spring Tax Relief!

What is the Super Deduction?

On 3rd March 2021, the Chancellor announced in the Budget that from 1st April 2021, companies investing in new plant and machinery will get a 130% first year allowance.  This has the potential to reduce your tax bill on qualifying equipment by up to 25%! It is for companies who are charged corporation tax (meaning partnerships, LLPs and sole traders are not included).

What’s changed?

Usually, the deduction would be 100%, or an 18% allowance per annum.

In addition to investing in upgrading your fleet to our brand new Towmate trailers, according to the list by Gov.uk, the following are also included:

• Solar panels
• Computer equipment and servers
• Tractors, lorries, vans
• Ladders, drills, cranes
• Office chairs and desks,
• Electric vehicle charge points
• Refrigeration units
• Compressors
• Foundry equipment

How do I take advantage of the deduction?

It is claimed in your company tax return, so you will need to work with your accountants to ensure they are aware of the deduction and any qualifying purchases as of 1st April and beyond.

Is there an annual limit?

There is no annual limit.

Am I able to use it on Hire Purchase agreements?

New purchases can qualify, subject to conditions. For more information, go to Gov.uk.

Is there anything else I should know?

The Super Deduction is a first-year allowance and there are exclusions, so you need to ensure purchases qualify before making any commitments. It also does not apply for orders placed before 3rd March 2021 (even if you do not receive the equipment until after 1st April 2021).