‘Super’ tax savings available under the Gov’s ’Super Deduction’ Scheme

Penmann - Super Deduction scheme

The government’s new ‘Super Deduction’ scheme announced in the 3rd March budget allows companies in manufacturing to benefit from a tax deduction of 130% on qualifying capital expenditure incurred over the next 2 years.   

Any capital investment made on qualifying plant and machinery investments taxes are cut by up to 25p for every pound invested.

This translates to a tax saving at 19% of £21,280 on Plant expenditure of £100K. Seems like a no brainer!

Here are some outline calculations for your interest:

  1. Illustration of tax saving if company has under £1m total asset spend in year

Plant cost £100,000

Tax deductible amount:

Old rules – £100,000 AIA claimed in full £100,000

New rules – £100,000 @ 130% super deduction claimed £130,000

Increased allowances claimable £30,000

Tax saving at 19% £5,700

2. If the company is spending over the Annual Investment Allowance limit of £1 million
in the year the tax saving from the Super Deduction regime is even more advantageous.

Illustration of tax saving if company has over £1 million spend in year

Plant cost £100,000

Tax deductible amount:

Old rules – 100,000 @ 18% writing down allowance £18,000

New rules – £100,000 @ 130% super deduction claimed £130,000

Increased allowances claimable £112,000

Tax saving at 19% £21,280

As well as being the trigger for Food Producers to push on with upgrades and expansion plans previously on hold but becoming urgent. Does your ventilation system need an upgrade? Are you looking at improving energy efficiency? Has your air handing system been holding you back? There is no time like the present to take advantage of the scheme with help to fix this type of issue.

You will need to register and we advise you to do it as soon as possible as it’s scheduled to come to an end on 31st March 2023. We can work alongside you to ensure all processes, quotes and specifications are prepared to support your application.

Call us to see how we can help you.

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