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Super-Deduction Deadline on 31st March

Capitalise Jan 10, 2023

The 31st March 2023 marks the end of the 'Super-Deduction' whereby businesses can claim 130% capital allowance on new plant and machinery costs. But what will this mean for small businesses? 

For more information on Super-Deduction, create a Capitalise for Business account and connect with a Funding Specialist.

What is a 'Super-Deduction'?

Branded as the 'biggest business tax cut in modern British history', this capital allowance allows businesses to reduce their tax bill by 130% of the cost of qualifying new asset investments including:

  • Manufacturing assets
  • Vans, lorries, trailors
  • Cranes, diggers, excavators
  • Production equipment, robotic arms
  • Tractors, combine harvesters, crop sprayers
  • Solar panels
  • Electric vehicle charging points
  • And more...

This means that for every £1 spent on new assets, 25p can be saved in corporation tax.

For example, an investment of £100,000 in new equipment will result in a super-deduction of £130,000 against taxable profits.

 

What are the benefits of 'Super-Deduction'?

As profitable businesses are set to pay more Corporation Tax come April 2023, being able to take advantage of this allowance whilst on a lower tax rate can lead to substantial savings. Using the example above, and applying the current corporation tax rate of 19%, you would achieve savings of £24,700.

 

How can Capitalise help?

With your Capitalise for Business account you can access over 100 lenders, many of which offer finance products for the assets included in the Super-Deduction. Over the past few months we have seen an increase in Asset Finance enquiries, many of which from businesses looking to benefit from the super-deduction before it comes to an end. 

The potential savings made can help pay towards the interest on a facility. In fact, in some instances it could potentially cover the whole cost of a hire purchase agreement offered by a high street bank.

Am I eligible to claim 'Super deduction'?

 

Qualifying businesses must:

  • Pay corporation tax
  • Invest in new and unused plant and machinery assets before 31st March 2023

These assets can be funded by a hire purchase agreement or via other types of asset finance, subject to meeting certain additional conditions.

Create your Capitalise for Business account for free today, and book a meeting with one of our dedicated Funding Specialists.

Alternatively, please speak to your accountant about how you could benefit from the 'Super-Deduction' allowance.

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