With the start of a new year, is now the time to invest in new plant and machinery and take advantage of the 130% super-deduction tax relief?
The 130% super-deduction tax relief continues until 31 March 2023. The tax relief allows limited companies to deduct 130% of the cost of new plant and machinery from their profits, where that plant would normally be included in the general capital allowances pool.
There is currently no limit on the amount a company can spend on new equipment qualifying for 130% tax relief.
Example
A company buys a new commercial vehicle costing £50,000.
£65,000 can be deducted from their trading profit.
Result: corporation tax saving of £12,350.
However, there would be a clawback charge on disposal of the asset, which could be as much as 130% of the proceeds.
As always, the GreenStones team are here to support you. Call the team on 01733 371180.