Last Updated 01 April 2021
Following the Chancellor of the Exchequer’s 2021 Budget, delivered on Wednesday 03 March 2021, McCloskey Equipment is pleased to confirm new machinery purchased by companies will qualify for the Government’s Super-Deduction Capital Allowance Scheme.
New plant purchased by a Limited company (a trading company) between 1 April 2021 and 31 March 2023 qualify for the scheme. Full details of the scheme are below, as published by the UK Government on the Gov.UK website:
From 1 April 2021 until 31 March 2023, companies investing in qualifying new plant and machinery assets will be able to claim:
- a 130% super-deduction capital allowance on qualifying plant and machinery investments
- a 50% first-year allowance for qualifying special rate assets
The super-deduction will allow companies to cut their tax bill by up to 25p for every £1 they invest, ensuring the UK capital allowances regime is amongst the world’s most competitive.
The government has offered unprecedented support for businesses during Covid. Even so, pandemic-related economic shocks and the accompanying uncertainty have chilled business investment. This super-deduction will encourage firms to invest in productivity-enhancing plant and machinery assets that will help them grow, and to make those investments now.
Extract from Gov.UK website: https://www.gov.uk/guidance/super-deduction
This information was extracted on 12 March 2021 and is subject to change without prior notification. Please check the Gov.UK website for the latest details.
In order to qualify for the Super-Deduction Capital Allowance Scheme, a company must fall within the following criteria:
- The expenditure is incurred on or after 1 April 2021 but before 1 April 2023
- The expenditure is incurred by a company within the charge to Corporation Tax
- The plant or machinery is unused and not second-hand
- The expenditure is not within any of the eight general exclusions in section 46(2) of CAA 2001, which include exclusions for expenditure on cars and on the provision of plant and machinery for leasing
- The expenditure is not special rate expenditure (which is defined at section 104A CAA 2001)
- The plant or machinery is not for use wholly or partly for the purposes of a ring fence trade, which means a trade in respect of which tax is chargeable under section 330(1) Corporation Tax Act 2010.4. Subsection 3 specifies the conditions which must be met in order for expenditure on.
Full details of the scheme are available here: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/967202/Super_deduction_factsheet.pdf