What are capital allowances?
Capital allowances let taxpayers write off the cost of certain capital assets against taxable income. They take the place of accounting depreciation, which is not normally tax deductible. Businesses deduct capital allowances when computing their taxable profits.
Enhanced capital allowances – Super Deduction:
- For expenditure incurred from 1 April 2021 until the end of 31 March 2023, companies can claim 130% capital allowances on qualifying plant and machinery investments
- Under the super-deduction, for every pound a company invests, their taxes are cut by up to 25p
How super deduction can save more taxes:
What is considered as qualifying plant and machinery:
There is not an exhaustive list of plant and machinery assets. The kinds of assets which may qualify for either the super-deduction or the 50% FYA include, but are not limited to:
Solar panels, computer equipment and servers, tractors, trucks, vans, ladders, drills, cranes, office chairs and desks, electric vehicle charging points, refrigeration units, compressors, foundry equipment.
Hurry up!
It is imperative for every business to utilize this final opportunity and take advantage of this Enhanced Capital Allowances–SUPER DEDUCTIONS for qualified capital expenditures incurred between 1st April 2021 to 31st March 2023 to offset against their businesses taxable profits!!!