A UK Government tax credit initiative to encourage firms to invest in productivity-enhancing plant and machinery assets that will help them grow and to make investments.
- Funding body:
- HM Treasury
- Maximum value:
- Application deadline:
- None specified
This scheme was first announced by the Chancellor at Budget 2021. It is provided by HM Treasury.
Objectives of Fund
Since the coronavirus (COVID-19) pandemic, existing low levels of business investment have fallen, with a reduction of 11.6% between Q3 2019 and Q3 2020.
Much of the UK’s productivity gap with competitors is attributable to historically low levels of business investment compared to its peers. Weak business investment has played a significant role in the slowdown of productivity growth since 2008.
Making capital allowances more generous works to stimulate business investment. As a result, these measures can promote economic growth and counter business cycles.
The super-deduction will give companies a strong incentive to make additional investments, and to bring planned investments forward.
The programme offers a 130% first-year capital allowance for qualifying plant and machinery assets; and a 50% first-year allowance for qualifying special rate assets. 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.
This super-deduction will encourage firms to invest in productivity-enhancing plant and machinery assets that will help them grow, and to make those investments now.
From 1 April 2021 until 31 March 2023, companies investing in qualifying new plant and machinery assets will be able to claim:
- A 130% super-deduction capital allowance on qualifying plant and machinery investments.
- A 50% first-year allowance for qualifying special rate assets.
The super-deduction will allow companies to cut their tax bill by up to 25p for every £1 they invest, ensuring the UK capital allowances regime is amongst the world’s most competitive.
Who Can Apply
Businesses in the UK may be eligible.
Most tangible capital assets used in the course of a business are considered plant and machinery for the purposes of claiming capital allowances. 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, lorries, vans
- Ladders, drills, cranes
- Office chairs and desks
- Electric vehicle charge points
- Refrigeration units
- Foundry equipment
How To Apply
Support can be accessed at any time.
More details can be accessed here
Useful documents & links
Addresses and contacts
For further information on how to obtain this grant locally, please contact the following:
- HM Revenue and Customs (HMRC)
Tel: 0845 010 9000