Super Deduction Allowance – have you taken full advantage?
The Government Super Deduction Allowance scheme came into effect on 1st April 2021 and runs until 31st March 2023.
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 current £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 currently. 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 and preserve your working capital for future projects.
Why use Lease UK?
As an award winning Independent Broker, Lease UK can source finance from a pool of accredited funders, preserving your existing funding lines with your bank, keeping your cash resources intact and allowing budget and cash flow projections to be managed with confidence going forward.
Please note: Not all equipment qualifies for the Super Deduction Allowance and finance may not be the right option for you. This 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.
Want to talk an idea through? Why not contact our experienced team on: 01372 466955
For further information from HM Treasury use link attached: Super Deduction Factsheet