Calling “last orders” for the Super Deduction
So what is the super deduction?
In broad terms it is a first year capital allowance, providing tax relief at an effective rate of 25% by cutting a company’s tax bill by 25p for every £1 invested in qualifying assets.
The main purpose of the super deduction is to encourage companies to continue to invest in plant and machinery throughout and after the COVID pandemic.
Its secondary aim was to discourage companies from waiting until the corporation tax rate rise to 25% in April 2023 in order to obtain relief from tax at the increased rate.
However, for many smaller businesses (with taxable profits <£50k), the increase to the 25% corporation tax rate may not apply to them, so the super deduction represents a real opportunity to reduce their tax bill by bringing forward investment plans to bank the super deduction, and time is running out!