Super-Deduction – Time is Running Out to Save
18/01/23

Super-Deduction – Time is Running Out to Save

In March 2021, the government introduced a new super deduction incentive where businesses can benefit from significant capital allowance measures. This was introduced as part of the economic recovery from the impact of 2020.

The current scheme runs until the end of March 2023, so there is still time to make the most of this benefit. But what is it and how can Exporta help?

 

What is the Budget 2021 Super Deduction?

From 1 April 2021 until 31 March 2023, companies investing in brand new qualifying plant and machinery assets will be able to claim:

  • a 130% super-deduction capital allowance on qualifying plant and machinery investments
  • a 50% first-year allowance for qualifying special rate assets

The super-deduction will allow companies to cut their tax bill by up to 25p for every £1 they invest.

Most tangible capital assets used during a business are considered plant and machinery for the purposes of claiming capital allowances. There is not an exhaustive list of plant and machinery assets. The kinds of assets which may qualify for either the super-deduction or the 50% FYA include, but are not limited to:

  • Solar panels
  • Computer equipment and servers
  • Tractors, lorries, vans
  • Ladders, drills, cranes
  • Office chairs and desks,
  • Electric vehicle charge points
  • Refrigeration units
  • Compressors
  • Foundry equipment

 

Savings will depend on the claim’s companies put in. The table below, created by BDO UK – specialists in tax and assurance services, gives an idea of the rates of relief for different claims

Asset class CA claim Asset type CA rate Effective relief of cost in year 1 for company
Main plant and machinery Super deduction New 130% 24.70%
AIA (max £1m) All 100% 19%
Main pool Second hand 18% 3.42%
Special Rate (generally Long Life assets or integral features) AIA (max £1m) All 100% 19%
SR deduction New 50% 9.50%
Pool Second hand 6% 1.14%

What Exporta Products Qualify for Super Deduction?

Although our core product range doesn’t apply here, our projects service and products would qualify under plan and machinery. We provide a range of racking and shelving solutions, from full warehouse fit outs to save spacing and efficiency increasing solutions.

 

Mezzanine flooring, however, is slightly different. While it would typically be classed as “flooring”, HMRC have conceded that mezzanine platforms which are used for storage in warehouses and are considered as a “large shelf” and will qualify fully for Capital Allowances.

 

A mezzanine platform is either a floor or a “large shelf” (storage equipment) and will rarely ever be both. Where it is a floor, no capital allowances are available. Where it is for storage, it will succeed in Capital Allowances.

 

Exporta Warehouse Projects

From initial design to a full working system, we have expert teams to help maximise your space and improve efficiency. Our projects team has in-depth knowledge of maximizing space, while our dedicated product teams know what products are going to make the biggest difference to making your systems more efficient.

We’ve worked on projects of all sizes, and have the experience and knowledge to provide you with best solutions. You can see a video on one of our warehouse projects here.

 

Want to Discuss Super Deduction and Your Warehouse Project?

If you’re looking to install large shelving or thinking about mezzanine flooring as an option, get in touch. We can look at the best options for your operation and you can benefit from the super deduction before the incentive ends on March 31st 2023.

Call us on 0800 294 4934, email sales@exportaglobal.co.uk or complete our online enquiry form.

Exporta Global 18/01/23

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