Super Deduction Allowance ending – don’t miss the boat!
The Government Super Deduction Allowance scheme is coming to an end on 31st March 2023- that is only 2 months away!
If your business qualifies and you purchase/take delivery/finance your equipment before 31st March 2023, you will still be able to take advantage of this highly beneficial scheme.
What is it? Designed to aid economic and business recovery, this Government incentive enables Limited Companies to buy qualifying new or replacement equipment, whilst offsetting this cost against the profit on your next corporation tax bill to the value of 130% as opposed to the normal 100% Annual Investment Allowance.
How can it help my business?
The scheme offers your company the opportunity to invest in modern equipment and technology with the subsequent benefits this investment will bring to your business both short and long term. Examples of qualifying equipment might be; scanning or diagnostic equipment, office equipment including computers and servers, plant and machinery, energy efficient LED lighting, to name but a few different asset types.
How it works:
In practical terms the new scheme means that if your company were to buy equipment to the value of £50,000 you can claim enhanced first-year allowances of £65,000 as opposed to the previous £50,000. At a Corporation Tax rate of 19% this means that this investment will harness tax savings of £12,350 as opposed to £9,500 using the previous Annual Investment Allowance. You can claim the Super Deduction Allowance when you purchase the equipment outright, or you can equally obtain these benefits by using one of our competitive Hire Purchase Agreements.
What happens after 31st March 2023?
When the Super Deduction Allowance finishes HMRC will revert to offering Annual Investment Allowance to Ltd Companies again which reduces the tax offset on new equipment from 130% of the new equipment cost to just 100%.
Please note: Not all equipment qualifies for the Super Deduction Allowance and finance may not be the right option for you. This current Government incentive it not open to partnerships or sole traders. We recommend that you speak to your accountant for tax advice pertinent to your business.
Why not contact our experienced team on: 01372 466955
For further information from HM Treasury use link attached: Super Deduction Factsheet