Companies can claim super-deduction from 1 April
The new super-deduction tax break, that will allow companies to deduct 130% of the cost of any qualifying investment from their taxable profits, is available on most new plant and machinery investments that ordinarily qualify for 18% main rate writing down allowances. This means that for every £1 a company invests they can reduce their Corporation Tax bill by up to 24.7p. The new temporary tax relief applies on qualifying capital asset investments from 1 April 2021 until 31 March 2023.
The super-deduction is designed to help companies finance expansion in the wake of the coronavirus pandemic and help to drive growth. This change makes the Capital Allowance regime more internationally competitive, lifting the net present value of the UK’s plant and machinery allowances from 30th in the OECD to 1st.
Commenting on the introduction of the super-deduction, the Chancellor of the Exchequer Rishi Sunak said:
'The super-deduction is the biggest two-year business tax cut in modern British history – driving our economy by helping businesses to invest, grow and support our Plan for Jobs. I urge firms across the UK to invest in our recovery by taking advantage of this great opportunity.'
An enhanced first year allowance of 50% on qualifying special rate assets has also been introduced for expenditure within the same period. This includes most new plant and machinery investments that ordinarily qualify for 6% special rate writing down allowances.
The measures have effect in relation to qualifying expenditure from 1 April 2021 and excludes expenditure incurred on contracts entered into prior to Budget day on 3 March 2021.
Newsletter
With our newsletter, you automatically receive our latest news per e-mail and get access to the archive including advanced search options!
Latest news
- Tax gap estimated at 5.3% for 2023-24
26/06/2025 - More...
HMRC missed out on £46.8bn in tax last year. Small businesses and Corporation Tax make up the biggest share of the
- Use HMRC app and be job-ready this summer
26/06/2025 - More...
Starting work this summer? Download the free HMRC app to get your NI number, check your tax code and stay on the right
- Check your State Pension forecast online
26/06/2025 - More...
Get a clear view of your future pension. Use the enhanced online service to check, boost, or track your State Pension