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Super-deduction tax break

The UK government has announced a new tax break for companies investing in qualifying plant and machinery assets, allowing them to cut down their tax bills and invest in equipment that will drive growth.

What is the super-deduction tax break?

From 1 April 2021 until 31 March 2023, companies will be able to claim a 130% super-deduction capital allowance on qualifying plant and machinery investments. A 50% first-year allowance will also apply to qualifying special rate assets from 1 April 2020 until 31 March 2022. The chancellor said the measure would help firms invest in productivity-enhancing assets, which would boost growth and create jobs in a post-pandemic and post-Brexit world.

Reducing tax for British manufacturing companies

This newsworthy super-deduction will allow companies to cut their tax bill by up to 25p for every £1 they invest. The policy, which includes the new super-deduction, follows on from the UK government's doubling of its investment allowance in the last budget, meaning firms can now receive a 130% deduction on investments in qualifying plant and machinery assets until 31 March 2023. It comes as part of a plan to kickstart the economy after the huge hits it took during the ongoing coronavirus pandemic. These measures will give UK businesses an opportunity to be more competitive, as well as modernise and utilise new technology in their production process, while driving economic growth.

Prioritising growth and job creation

The government's investment in the economy is expected to lead to higher demand for plant and machinery, made by some of the UK's leading manufacturers. This should in turn provide an increased opportunity for manufacturers of highly specialised items to grow their businesses and employ or train new staff. This super-deduction will also allow firms that have suffered during the pandemic a chance to reinvest and create jobs in the local community.

Can your business benefit from the super-deduction tax break for plant & machinery investments?

Manufacturing companies that could benefit from the tax break include those in the automotive, engineering, aerospace and metal manufacturing sectors and it could also lead to an increased demand for resources. After a tough year in business, this is a major opportunity for manufacturers to invest in jobs and growth across the UK. At SRB Associates, we specialise in accountancy for small and medium sized businesses and we are here to help our clients navigate the new tax breaks, capital allowances and post-pandemic economic incentives. We are proud to provide reliable accountancy services in Melton Mowbray and the surrounding areas and our financial experts have studied these new economic policies in depth.

Get in touch

Call our experienced accountants today on 01664 503 681 to see how your business could benefit from the super-deduction tax break.