130% Super Deduction

For expenditure incurred from 1 April 2021 until the end of March 2023, companies can claim 130% capital allowances on qualifying plant and machinery expenditure.

As a result businesses will now benefit from significant capital allowance measures:

•The super-deduction – which offers 130% first-year relief on qualifying main rate plant and machinery until 31 March 2023 for companies

•Annual Investment Allowance (AIA) – providing 100% relief for plant and machinery investments up to its highest ever £1 million threshold, until 31 December 2021.

•The 50% first-year allowance (FYA) – for special rate (including long life) assets until 31 March 2023 for companies.

What is plant and machinery?

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

There is not an exhaustive list of plant and machinery assets. The kinds of assets which may qualify for either the super-deduction or the 50% FYA include, but are not limited to:

•Solar panels
•Computer equipment and servers
•Tractors, lorries, vans
•Ladders, drills, cranes
•Office chairs and desks,
•Electric vehicle charge points
•Refrigeration units
•Compressors
•Foundry equipment

The full treasury fact sheet can be downloaded here.

If you have any queries or would like to discuss further do not hesitate to contact us.