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Capital Allowances Super Deduction

03.03.2022

Business

Capital Assets Super Deduction

Capital allowances super deduction  

 

From 1 April 2021 until 31 March 2023, companies investing in qualifying new plant and machinery assets will be able to claim, the following: 

Businesses should look to make the most of these incentives, announced which aim to encourage businesses to invest in productivity-enhancing plant and machinery assets to help them grow. 

Both of the above gain businesses a much higher tax deduction in the tax year or purchase than would otherwise normally occur. These allowances will run alongside the annual investment allowance, currently set at £1m, which already gives 100% relief on qualifying plant and machinery.  

 

However please note that the super deduction is only available to companies subject to corporation tax, not individuals, partnerships or LLPs.  

 

The table below illustrates the effective rates of relief for the different claims: 

 

Asset class

Capital Allowance claim

Asset type

Capital Allowance rate

Effective relief of cost in year 1 for company

Main plant and machinery

Super deduction

New

130%

24.7%

 

AIA (max £1m)

All

100%

19%

 

Main pool

Second hand

18%

3.42%

Special Rate (generally Long Life assets or integral features)

AIA (max £1m)

All

100%

19%

 

SR deduction

New

50%

9.5%

 

Pool

Second hand

6%

1.14%

 

It is important to consider this when you are planning on purchasing qualifying plant and machinery. 

 

Our business services team is available should you have any questions or want to discuss future plans for your business, while considering how to optimise tax efficiencies. Please contact us on 01223 810100 or email help@cklg.co.uk  

 

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