If you are you thinking of investing in a new plant or other equipment, then it could save on your corporation tax bill if you buy before 31st March 2023 using the super-deduction scheme.
The super-deduction was designed to help companies finance expansion & growth in the wake of the coronavirus pandemic and is shortly coming to a close. It offers Limited companies 130% first-year tax relief on qualifying new assets purchased before the end of March and are declared on your corporation tax returns.
Under the scheme and in simple terms, for every £1,000 spent on assets you will make an additional £57 corporation tax saving, So, if your company buys a £2,000 computer (which you would normally claim 100% allowances) you save 19% corporation tax £380 in the tax return but this would become a computer that is worth 130% of its’ value £2,600 hence a higher reduction in corporation tax of £494 and a saving of £114.
Howard adds ‘Maximising tax savings through reliefs and allowances is something we do for all our clients and as the super-deduction scheme is only available until March 2023 we thought it would be a good time to remind our wider business community. If you are thinking of buying assets anyway then it may well pay to do it before the deadline as it is the invoice date on the purchase that counts’
The super-deduction scheme is only available to limited companies paying corporation tax however sole traders and self-employed can still take advantage of annual investment allowance where 100% of the asset value can be claimed against tax instead of the 18% main allowances.
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