The Super-Deduction Capital Allowance Scheme was introduced by the UK Government in the April 2021 budget. The scheme allows companies to write off the cost of certain capital assets against taxable income. The rules can be confusing, so we have put together this handy guide to Super-Deduction to help you navigate the rules. You can also download a Super-Deduction calculator that will tell you exactly how much you can expect to save.
What is Super-Deduction?
Super-Deduction is the name given to a new government scheme allowing companies to benefit from tax relief on qualifying capital assets. Under the new rules, capital allowance increases from 100% to 130% on qualifying plant and machinery investments. Firms can also benefit from 50% first year allowance for qualifying special rate assets.
Which assets qualify for Super-Deduction savings?
To meet the requirements of Super-Deduction, assets must be a qualifying form of plant or machinery investment. They must be used within the business itself, meaning they cannot be leased or hired out to clients. ‘Plant or machinery’ in this context is a relatively broad term, meaning there is a good chance that the assets you are investing in will qualify. As you might expect, heavy assets such as tractors, forklifts and diggers all count. However it should also be noted that assets such as office furniture, computer equipment and servers are also included. It is important to know that to qualify, assets must be bought new – second-hand goods are not eligible.
Warehouse racking, shelving, conveyor systems, mezzanine floors and general warehouse fit-out are all items that qualify for the new super-deduction allowance.* At Oakway Storage, we work with businesses to support growth and the creation of long-term plans for companies looking to invest in their warehouse in a strategic way.
We have developed this Super-Deduction calculator to provide business owners with a tool to support their decisions around investment and provide an estimate of the savings available under the new scheme.
Complete this form and we’ll send you a copy entirely free of charge. If you have any questions about the calculator, or would like to talk about how Oakway can help your business forward through investment in intelligent logistics solutions, please give the team a call.
Super-deduction at a glance
- The super-deduction rules will be active between 01 April 2021 and 31 March 2023
- Under the scheme, companies will be able to save 25p per £1 invested
- In addition to 130% Capital Allowance, companies can benefit from 50% first year allowance for qualifying special rate assets.
* Individual circumstances vary. Your accountant or tax adviser will be able to confirm exactly what expenditure is eligible under this scheme