Unlike the AIA, there is no limit or cap on the amount of capital investment that can qualify for either the super deduction or the SR allowance. The allowances apply for capital investments made between 1 April 2021 and 31 March 2023. The super deduction and SR allowance are only available to companies subject to corporation tax, not individuals, partnerships, or LLPs, and only where the contract for the plant and machinery (including fixtures installed under a construction contract) was entered into after 3 March 2021 and expenditure is incurred after 1 April 2021.
Plant and machinery are tools of the trade, kept permanently for the use of the business. What counts as plant and machinery will depend on the nature of your business.
To make a claim for super-deduction or special rate first year allowances, the plant and machinery must:
· be new and unused.
· not be:
-given to you as a gift
-a car (other vehicles may qualify for the super-deduction) — find out about claiming capital allowances on cars
-bought to lease to someone else (unless it is background plant or machinery within a building)
-purchased in the accounting period the business activity ceases
Plant and machinery that may qualify for the super-deduction includes (but is not limited to):
· machines such as computers, printers, lathes and planers
· office equipment such as desks and chairs
· vehicles such as vans, lorries, and tractors (but not cars)
· warehousing equipment such as forklift trucks, pallet trucks and stackers
· tools such as ladders and drills
· construction equipment such as excavators, compactors, and bulldozers
· some fixtures such as kitchen and bathroom fittings and fire alarm systems
The super deduction gives relief at 130% of the qualifying cost compared to the usual 18% writing down allowance for investment in main pool plant and machinery assets. The SR allowance gives relief at 50% of the qualifying cost in the first year with the balance going into the normal special rate pool to be written down at the usual 6% rate in future years
For help and advice on all capital allowance claims, please contact us on 0117 2565052 or email us on info@taks.org.uk
Should you require any professional advice please contact us
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