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Capital Allowance Super Deduction on Plant and Machinery spend

Capital Allowance Super Deduction on Plant and Machinery spend

What is it?

This is a temporary tax relief. The measure provides enhanced capital allowances for qualifying expenditure on plant and machinery incurred from 1 April 2021 and up to and including 31 March 2023.

Who is it for?

Companies within the charge to Corporation Tax who invest in plant and machinery on or after 1 April 2021.

How does it work?

Those that qualify can claim:

  • a super-deduction providing allowances of 130% on most new plant and machinery investments that ordinarily qualify for 18% main rate writing down allowances
  • a first year allowance of 50% on most new plant and machinery investments that ordinarily qualify for 6% special rate writing down allowances

There are some general exclusions to this rule such as cars, zero-emission good vehicles, second hand items amongst others.

The annual investment allowance (AIA) is still available on certain assets and companies may find it useful to claim instead of the super deduction on special rate pool assets.

What should I do next?

Critchleys Clients: If you have specific questions, please contact your Critchleys Accountant directly. 

Non-Critchleys Clients: if you have any questions, please get in touch.

 


First Published 5 March 2021
Last Updated 5 March 2021

5 March 2021
First published.

Find out more about Ian Timms

Ian Timms

Ian Timms

Ian is a Partner and the Head of Business Tax at Critchleys LLP.

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