Super-deduction for plant & machinery

As announced in the Budget earlier in the year, for expenditure incurred from 01 April 2021 until the end of March 2023, companies can claim 130% capital allowances on qualifying plant & machinery.

Under this super-deduction, for every pound a company invests in plant & machinery, their taxes are reduced by up to 25p.

Capital allowances let taxpayers write off the cost of certain capital assets against taxable income.  They take the place of accounting depreciation which is not normally tax deductible.  Businesses deduct capital allowances when computing their taxable profits.

So, what is plant & machinery ?

Most tangible capital assets used in the course of a business are considered plant & machinery for the purposes of claiming capital allowances.

There is not an exhaustive list of plant & machinery assets.  The kind of assets which may qualify for the super-deduction include:

  • Computer equipment and servers
  • Tractors, lorries, vans
  • Ladders, drills, cranes
  • Office furniture
  • Electric vehicle charging points
  • Refrigeration units

If you would like further information about this or would like to discuss how the timing of capital investment could impact your corporation tax bill feel free to get in touch.  The first meeting is always free.


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