UK government launches super-deduction tax-relief incentive

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The biggest two-year business tax cut in modern British history has launched today (1 April).

The UK government’s super-deduction incentive offers 130% first-year relief on qualifying main rate plant and machinery investments until 31 March 2023 for UK companies of all sizes that pay corporation tax.

According to the Treasury, this means that for every £1 a company invests, their taxes are cut by up to
25p.

The kinds of assets that may qualify for the super-deduction include, but are not limited to, tractors, lorries and vans; solar panels; electric vehicle charge points; computer equipment and servers; ladders, drills and cranes; office chairs and desks; refrigeration units; compressors and foundry equipment.

Furthermore, all qualifying assets must be new and unused.

The government said it was introducing a super-deduction to “give companies a strong incentive to make additional investments, and to bring planned investments forward”.

Since the Covid-19 pandemic, existing low levels of business investment have fallen, with a reduction of 11.6% between Q3 2019 and Q3 2020.

It’s hoped that the change will make the UK’s capital allowance regime more internationally competitive, lifting the net present value of the country’s plant and machinery allowances from 30th in the Organisation for Economic Co-operation and Development to first, said the Treasury.

In addition to the super-deduction, companies can also claim a first year allowance of 50% on most new plant and machinery investments that ordinarily qualify for 6% special rate writing down allowances.

What’s more, the threshold for the Annual Investment Allowance, which provides total relief for plant and machinery investments, has increased to £1m until 31 December 2021.

Visitors to Robotics and Automation – the UK’s largest dedicated robotics and automation exhibition – on 2nd and 3rd November 2021 at the Ricoh Arena in Coventry will be able to take advantage of the super-deduction and other capital allowance measures.

The event will see industry-leading suppliers to the UK showcase the latest in industrial and collaborative robots, autonomous mobile robots and automated guided vehicles, automated assembly machines and parts handling equipment, motion control and machine vision technology, sensors, as well as the latest advancements in AI and the IoT enabling smart factories and smart manufacturing.

Robotics and Automation 2021 exhibitor CKF Systems said: “[The super-deduction] is a great opportunity for businesses to invest in new plant machinery to secure their future success.”

For more details on Robotics and Automation 2021,  please contact Nairn Foster (020 8037 1774 / nairn.foster@akabomedia.co.uk) or Rahul Nair (020 8037 1776 / rahul.nairn@akabomedia.co.uk)

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