Super Deduction
For corporate businesses that are planning investment, a reminder that the Capital Allowance Super Deduction relief is only available until 31 March 2023. The relief enables companies investing in qualifying Plant & Machinery to claim 130% Capital allowances in the year of purchase. This means that for every £10,000 invested in qualifying assets a £13,000 deduction is allowable against the Companies taxable profits.This allowance is available in addition to the usual Annual Investment Allowance (AIA).
The relief only applies to assets purchased new, not second hand and will cover assets which would normally qualify for the Annual Investment Allowance such as Vans, Tractors, Equipment and Tools if the contract was entered into after 3 March 2021.
There is a requirement to keep a record of the date and details of any assets purchased on the basis that if any assets are disposed of which have claimed the Super Deduction before 31 March 2023, a balancing charge is generated to claw back the relief granted earlier. This will be between 1.0 and 1.3 times the actual disposal value depending on your accounting period dates.For disposals of assets after 31 March 2023 you are not required to apply any multiplier.
If you would like further clarification, then please contact us.
Callum Somers FCCA
Senior Manager
Growing up on a Dairy farm in East Devon, Callum joined Evolution ABS in 2010 and qualified as a Certified Chartered Accountant in 2015. Callum looks after a wide variety of clients, helping them meet their accountancy, payroll and tax needs.
Outside of work, Callum is a very keen sportsman and particularly enjoys a game of golf or playing football for his local club.