There was some welcome news last week when the Chancellor of the Exchequer announced a new super-deduction of 130% for qualifying capital expenditure. Currently a company spending £10m would achieve tax relief of £2.6m in the year of expenditure, whereas they would achieve tax relief of £13m under the new rules.
Capital allowances essentially allows businesses to write off the costs of tangible capital assets, such as plant or machinery, against their taxable income. They take the place of commercial depreciation, which is not an allowable tax deduction.
Designed to stimulate business investment, it is certainly great news for any of our customers looking to make significant capital investment over the next two years.
So, what does it mean in real terms and how will it work?
This measure will temporarily introduce increased reliefs for expenditure on plant and machinery. For qualifying expenditures incurred from 1 April 2021 up to and including 31 March 2023.
Companies can claim in the period of investment:
· a super-deduction providing allowances of 130% on most new plant and machinery investments that ordinarily qualify for 18% main rate writing down allowances.
· a first year allowance of 50% on most new plant and machinery investments that ordinarily qualify for 6% special rate writing down allowances.
In short, now is a great time to think about investing in new machines and with the launch of the Revolution 2.0, the latest edition to our range of fully automatic tray sealers the time is right! The Revolution 2.0 machine is designed to be capable of achieving up to 25 cycles per minute sealing 8 trays at a time.
Talk to our sales team on 01565 756555 or click here