In the March 2021 Budget, the Chancellor announced a superdeduction scheme that provides a 130% deduction for the cost of new plant or equipment if it is purchased by a company before 1 April 2023.
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 April 2023.
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 January 2022 but will now stay at £1m until 31 March 2023.
These allowances offer 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.
If you need help with this or any other accountancy, tax and small business issues, get in touch for a no-obligation discussion – see our Contact Us page for how to reach us.
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