The Super Deduction comes to an end

The 31st March 2023 marks the end of the 'Super-Deduction' whereby businesses can claim 130% capital allowance on new plant and machinery costs. .

What is a 'Super-Deduction'?

Branded as the 'biggest business tax cut in modern British history', this capital allowance allows businesses to reduce their tax bill by 130% of the cost of qualifying new asset investments including:

  • Manufacturing assets
  • Vans, lorries, trailors

  • Cranes, diggers, excavators

  • Production equipment, robotic arms

  • Tractors, combine harvesters, crop sprayers

  • Solar panels

  • Electric vehicle charging points

  • And more...

This means that for every £1 spent on new assets, 25p can be saved in corporation tax.

For example, an investment of £100,000 in new equipment will result in a super-deduction of £130,000 against taxable profits!

As profitable businesses are set to pay more Corporation Tax come April 2023, being able to take advantage of this allowance whilst on a lower tax rate can lead to substantial savings. Using the example above, and applying the current corporation tax rate of 19%, you would achieve savings of £24,700.

For more information contact us on 01303 850992.