Discover the benefits of super-deduction tax breaks

Our asset finance specialist, Tracey Hamilton, is advising businesses to consider investing in machinery and equipment, in order to benefit from ‘super-deduction’ tax breaks.

Until 31 March 2023 businesses investing in qualifying assets will benefit from up to 130 per cent first-year capital allowance, which means that 130 per cent of the cost of a brand-new asset can be deducted from company profits.

The tax deduction scheme, which was launched on 1st April 2021, is designed to boost investment and growth as the country emerges from COVID-19 restrictions. The manufacturing, construction, transport, logistics and hospitality sectors expected to benefit the most from the allowance.

As an example of how the scheme works. If a business purchases an asset for £25,000, then £32,500 will be deducted from its profit, giving tax relief of £6,175.

The scheme is only available to companies who pay corporation tax and expenditure must be on new and unused plant and machinery only, therefore second-hand equipment will not apply.

Tracey Hamilton, asset finance specialist at Bathgate Business Finance, said: “If businesses are looking to invest in new machinery or equipment for their company, or perhaps even a new commercial vehicle, now is the right time.

“The super-deduction allowance is the most attractive tax incentive for business investment ever offered by a British government and a direct way to help businesses invest and drive growth in the economy. Companies can claim back 25p for every pound they invest in ‘qualifying’ machinery and equipment for two years.

“The team here at Bathgate is using its extensive network, market knowledge and access to a large panel of funders to broker deals for businesses – at no cost to them – that will allow them to capitalise on this government scheme and emerge stronger, post-pandemic.”

Assets qualifying for the 130 per cent deduction include plant, machinery, tooling, computer equipment, furniture, software and commercial vehicles such as vans and lorries (cars do not qualify and are specifically excluded).

Assets qualifying for the 50 per cent deduction include air-conditioning and air-cooling systems, hot and cold-water systems, electrical and lighting systems, external solar shading, lifts, escalators and moving walkways, pace and water heating systems and the thermal insulation of buildings.

If you are considering purchasing any new assets would like to discuss super-deduction further, please contact Tracey Hamilton on 07557 973196 or email