Companies of all sizes can benefit from the Super Deduction – it could pay to invest in your company’s growth in the next two years.
From April 1 2021 for 2 years companies can offset 130% of qualifying spending on plant and machinery against their taxable profit in that first year.
SMEs’ deposits rose 20% to £252bln in the pandemic; the Super-Deduction encourages businesses to spend, in turn driving economic activity and productivity.
- Applies to all asset types, New and not Used
- No limit on purchases
- Cash, loans or Asset Finance purchases
- Company cars not included
- Claw back may apply to assets sold during the period
Example: Spend £50,000 on assets, offset 130% against taxable profits = £65,000
At 19% Corporation Tax rate = Tax Saving of £12,350
(£50,000 x 130%) x19% = £12,350
Take your accountant’s advice for your business, but it could be worthwhile re-considering plans that had been shelved during the pandemic, or bringing forward plans?
Assets could drive growth in your business and the economy forward again.
Guidance: https://www.gov.uk/guidance/super-deduction#history
Mark Grant, April 2021.
info@fiduciacommercialsolutions.co.uk 01636 614 014
