Capital Allowances - Super Deduction

Introduced in the recent budget, the capital allowances super deduction will provide businesses with a 130% allowance for new main rate plant and machinery.


The super deduction of 130% is only available to limited companies who incur expenditure on brand new qualifying main rate plant and machinery between 1 April 2021 and 31 March 2023.


Owner managed businesses and tenants completing refurbishments, renovations or purchasing new equipment will be the main beneficiaries from this generous deduction.




What Can You Claim....


The 130% super deduction includes expenditure incurred on main rate “Plant and machinery” such as I.T and office equipment, warehouse and factory machinery and energy efficient installations and solar panels.

In addition to the above, flooring, kitchens & bathroom suites, fire alarms & security systems and more will qualify.


An Extra 50% First Year Bonus....


Expenditure on ‘special rate’ items of plant and machinery will receive a first year 50% deduction with no cap on amount.

This will include cold water systems, electrical and heating installations, ventilation machinery, air conditioning units, lifts and more.


Bad News For Commercial Property Landlords & Leased Plant....


The Investment in new structures, buildings or equipment that will be leased, will not be covered under either of the 130% or 50% super deductions.

Equipment purchased by commercial property landlords with buildings held in a limited company are also excluded.


However commercial property landlords can still make use of the standard capital allowances regime which is extremely generous and will help to mitigate tax liabilities from rental profits.