This year’s budget was arguably the most important since the end of the war, with the Chancellor setting out how the UK will recover economically once the COVID-19 pandemic finally subsides.
One of the key announcements in his budget was on the introduction of the super-deduction, a new tax break aimed at spurring on business growth.
Here, Andrew Diver, Beatons Group’s Head of Tax, explains what the super-deduction is and how it could help businesses in the east.
What is it?
To put it simply, the super-deduction is a tax break for businesses which allows them to deduct 130% of the cost of purchasing assets, like machinery or plant, against its profits.
This means a company buying £100,000 in new machinery would be able to deduct £130,000 against tax, reducing its liability by £24,700.
The scheme is aimed at companies looking to expand and hopes to encourage them to invest in new machinery and plant to achieve their goal.
Who can apply?
Any business that pays corporation tax can get the super-deduction on their business asset purchases – from small firms just starting out to supermarket giants like Tesco or ASDA.
Businesses will also be pleased to know there is no limit on the level of purchases allowed under the scheme.
Sole traders and partnerships, however, cannot apply for the super deduction.
What assets are included?
To attract as many businesses to the scheme as possible, what the Government counts as plant or machinery is fairly broad.
It includes items such as lorries, trucks, diggers and tractors but also covers things like office furniture, computers or screens – anything that can be used during the course of business.
The Chancellor hopes the tax incentive will give companies the confidence to press on with their plans for expansion, despite many suffering a setback last year due to the pandemic.
If you have any questions on how to make the most of the super-deduction, please call Beatons Group on 01473 259777 or email info@beatons.co.uk