In Rishi Sunak’s Budget Statement on 3 March, he put in place some fiscal tax measures that he hopes will encourage investment and kick-start the economy in readiness for the post-pandemic, post-Brexit era.
What is a super deduction?
The much-vaunted super deduction allows companies to claim a 130% first year allowance (FYA) for investment incurred on ‘main pool’ items of plant and machinery acquired in the period between 1 April 2021 and 31 March 2023. This includes the more obvious items of plant and machinery like manufacturing equipment, machines and computers, but it also extends to items of main pool plant and machinery that are fixtures in properties.
When we think of investment in new plant and machinery, we must remember that the super deduction may also be available for a proportion of construction expenditure incurred on new or refurbished buildings. This point is often overlooked but it could be a stimulus to commence building works in the period.
New 50% FYA
Sitting alongside the super deduction is a 50% FYA for expenditure incurred on special rate pool items of plant or machinery, which includes integral features, solar panels and thermal insulation
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Aubrey Calderwood is managing director of leading fiscal incentives company, Gateley Capitus. He also previously ran the capital allowances practice of a ‘Big Four’ accountancy firm. He has a professional background in both taxation and property and has acted for some of the UK’s largest entities across a variety of sectors. Aubrey helps...