In March of this year, the government announced the new super-deduction capital allowance scheme. This scheme allows companies to cut their tax bill by up to 25p for every £1.00 spent, making the UK capital allowance regime one of the world’s most competitive and making it an ideal time to invest in capital equipment.
Available until the 31st of March 2023, the scheme applies to eligible capital expenditure incurred between the dates above and applies to main rate plant and machinery investments that are purchased from new. This encompasses many of Loop Technology’s products and solutions.
Companies will be able to claim 130% super-deduction capital allowance on qualifying plant and machinery investments and/or 50% first-year allowance for qualifying special rate assets.
If a company incurs £500,000 of eligible expenditure, that expenditure is able to be claimed at the super deduction rate. So, the company can deduct £650,000 from taxable profits (130% of initial investment) which will allow them to save up to 19% of that amount, or £123,500 on its corporation tax bill.
Disclaimer: Companies should seek advice from their tax advisors.