Super Deduction Tax Break: How Can It Benefit Your Workplace?

October 21st, 2021

Last updated: July 14th, 2022

As the UK emerges from the huge economic impact of the COVID-19 pandemic, one of the new schemes that has been put in place to help businesses invest is the “Super Deduction Tax Break”. This is a scheme introduced by the government to provide a tax incentive for business investment.

It is designed to get the economy moving again and start to drive growth, and if you use it correctly, you can reap the tax benefits of investing at this time. Hear from the experts at Robinsons Facilities Services who can advise on the types of equipment and machinery that qualifies for the tax break.

What Does the Tax Break Mean for Business?

For every pound you invest in machinery and equipment that qualifies under the scheme, your company can claim back £0.25p.

The scheme has already launched and was designed to last two years from 1 April 2021. Businesses still have plenty of time to take advantage.

Until 31 March 2023, companies can claim 130% capital allowances on qualifying plant and machinery investments. These would normally qualify for 18% tax relief.

Let’s dive into an example of a company using the scheme and incurring £1m of expenses on equipment that qualifies for the tax break. That £1m spending means that the company can deduct £1.3m when doing the tax sums for the year. This could save the company up to 19%, or £247,000 when paying corporation tax.

What Purchases Qualify?

Not all business expenses qualify for this 130% rate. This government fact sheet makes it easier to understand.

Purchases qualifying for capital allowance are described as “plant and machinery”. The definition of exactly which purchases qualify is not set in stone, but there is a key line in the UK government’s own advice:

“Most tangible capital assets used in the course of a business are considered plant and machinery for the purposes of claiming capital allowances.”

Refrigeration units are one of the examples of a qualifying asset. ​​Others include:

• Solar panels
• Computer equipment and servers
• Tractors, lorries, vans
• Ladders, drills, cranes
• Office chairs and desks
• Electric vehicle charge points
• Compressors
• Foundry equipment

It’s worth discussing with your accounts department or chartered accountant before making the purchase, but if it is justifiably used in the course of your business operating it is possible that a new piece of equipment will qualify.

The economy can undoubtedly benefit from a stimulus, and this encouragement to buy business equipment may be the ideal way to invest in the future.

Robinsons Facilities Services are experts on facilities and equipment, offering maintenance and installation of certain qualifying assets under the Super Deduction Tax Break. Get in touch to discuss as to whether or not your equipment and premises would qualify.

Working across Yorkshire, we cover North Yorkshire, West Yorkshire, East Yorkshire and South Yorkshire and offer a fast, efficient response time to all breakdowns and repairs. Contact us today for all planned, reactive maintenance or emergency call out.