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Super-Deduction, ‘Use it or lose it’ warn Surrey accountants

The clock is ticking for businesses to use the Super-Deduction allowance before it ends, TWP accountants are warning.

Businesses can claim a 130 per cent capital allowance on new plant and machinery costs via the Super-Deduction, until the end of March 2023.

In effect this means for every pound a company spends, their Corporation Tax can be cut by up to 25p.

“The Super-Deduction is an excellent opportunity for businesses to invest in major plant or machinery and offset some of their Corporation Tax bill.

“I recommend any companies who have been putting off large purchases due to concerns about the economy take the opportunity to use this allowance before it’s too late,” said Stephen Nicholls, Business and Corporate Tax Manager at TWP Accountants.

The 130 per cent deduction gives companies the opportunity to reduce their Corporation Tax bills. This allowance is not available to unincorporated companies and can only be claimed on new and unused equipment.

Nevertheless, given that Corporation Tax rates are due to rise for more profitable companies from April 2023, now is the time to be thinking about making any significant purchases to take advantage of the super deduction and lower tax rate.

Plant and machinery are any form of ‘tangible’ asset used in the day-to-day running of a business. Some examples include:

  • Ladders, drills, cranes
  • Office furniture
  • Refrigeration units
  • Electric Vehicle charge points
  • Compressors
  • Foundry Equipment
  • Solar Panels

“If your company is looking to make significant investments now is the ideal opportunity to take advantage of the Super-Deduction,” added Stephen. “It may even be beneficial to bring expected expenditure forward before this relief is lost.”

To find out more about TWP’s wide range of tax and accounting services, please contact us.