The capital allowances super deduction was introduced in March 2021 to help the economic recovery from the COVID-19 pandemic. It gives businesses investing in new equipment a much higher tax deduction in that tax year than would otherwise apply. If you buy certain new equipment (including computer equipment) you can claim 130% capital allowance.
So, if you spend £1,000 on computer equipment, it will reduce your corporation tax bill as if you had spent £1,300.
However, the 31 March 2023 deadline is fast approaching, so if you want to make the most of it, the time to act is now!
Supply chain issues
Sourcing hardware is currently quite challenging (as with many supply chains) and it is still difficult to get hold of certain specifications or equipment.
If you are thinking about what hardware your business is going to need over the next few years, it could be beneficial to place advance orders on new technology now and take advantage of the Super Deduction rules.
A full summary from HMRC is available here and your accountant will be able to advise you too.
How we can help
We are working with several of our clients, auditing their current technology and looking at how we can help future-proof their business, taking advantage of the extra allowance.
If you’d like a conversation about how ILUX could support you, please get in touch.