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Super Deduction

As part of the Chancellor’s Budget 2021 announcement, a new “super-deduction” capital allowance scheme was announced. This means that companies will be able to claim 130% capital allowances on qualifying plant and machinery investments purchased between 1 April 2021 and 31 March 2023.

 

Under the super-deduction, for every pound a company invests, their taxes are cut by up to 25p.

 

This scheme is available to all businesses — big or small.

 

HMRC says that “Most tangible capital assets used in the course of a business are considered plant and machinery for the purposes of claiming capital allowances.”

 

These can include:

 

  • Office furniture
  • Computers, tablets, laptops
  • Business mobile phones
  • Carpenters’ tools
  • Office chairs and desks
  • Electric vehicle charge points
  • Office bookshelves
  • Office TVs
  • Digital display panels
  • Air conditioning units

 

 

Why have these changes been applied?

Following the Covid-19 pandemic, the usual level of business investment has fallen. By making capital allowances more generous, the super-deduction will give companies a strong incentive to make additional investments and to bring planned investments forward, encouraging nationwide economic growth.

 

Where can I find out more information?

Further details about these changes and the additional capital allowance changes can be found here.

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