Temporary tax reliefs on qualifying capital asset investments from 1 April 2021

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What does this involve?

From 1 April 2021, businesses in the UK can benefit from temporarily increased tax relief on their expenditure on plants and machinery.

For qualifying expenditures incurred from 1 April 2021 up to and including 31 March 2023, companies can claim:

  • 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

The measure also temporarily amends the rules covering expenditure incurred on plant and machinery used partly in a ring fence trade in the oil and gas sector.

This measure is designed to stimulate business investment. It does so by increasing the incentive to invest in plant and machinery by offering higher rates of relief than were previously available.

Am I eligible?

Yes, if your business is a company within the charge to Corporation Tax which is planning to invest in plants or machinery between 1 April 2021 and 31 March 2023, inclusive.

What does this cost?

This is a free service.

Who is this for?

Companies within the charge to Corporation Tax which invest in plants and machinery on or after 1 April 2021.

How long does this take?

The increased tax relief applies between 1 April 2021 and 31 March 2023, inclusive.

Important information

The measure applies to qualifying expenditure from 1 April 2021. It excludes expenditures incurred on contracts entered into prior to Budget day on 3 March 2021.

Check the UK Government website for additional exclusions.

Next steps

Visit the UK Government website for full details.

If you have any questions, contact HMRC on email: contact.capitalallowances@hmrc.gov.uk

 

Support provided by HMRC

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