Benefits of the new Government Supertax Deduction scheme
The covid-19 pandemic has left many workshops struggling to invest in the new machinery that they require. However, in this year’s budget, Chancellor Rishi Sunak has announced an amazing new scheme to enable workshops to benefit from new equipment purchases and offset their tax liabilities.
SUPER DEDUCTION SCHEME EXPLAINED
In the past businesses have been able to claim capital allowances when they purchase new equipment. The value of such equipment gets deducted from your profits meaning you will save money on your tax bill.
However, this new Super deduction scheme is now even more attractive, allowing you to offset 130% of the asset value against the taxable profit in that first year. That’s around a saving of 25p for every £1 you spend.
From the 1st April 2021 right up till 31st March 2023 you’ll be able to claim this higher tax relief.
WHO CAN BENEFIT FROM SUPER DEDUCTION?
It will cover many different businesses, industries and sectors. The great news is that it covers the automotive workshop industry but there are a few rules:
• It only applies to UK businesses that are subject to corporation tax. Sole traders and partnerships are therefore not included.
• Businesses that intend to keep the newly bought equipment
• Purchases must be bought in cash, HP or through a loan from 01/04/2021 to 31/03/2023
This covers the basics but should you need further info, contact our team or your business accountant.
WHAT EQUIPMENT CAN I PURCHASE?
According to HMRC this scheme applies to plant and machinery. The great news is that it covers a huge range of our products from Post Lifts to other essential equipment that a progressive workshop needs.
Just to also note that the following equipment will not fall under the new scheme:
• Second-hand or used equipment
• Cars
• Integral features and long term assets like lighting systems etc
Hire purchase agreements do qualify however they must fall within the two-year period.
REAL EQUIPMENT EXAMPLES
The exciting news is that you can save thousands off brand new, top of the range equipment with V-tech. Here are just a few examples.
The official calculation is:
Your effective saving = Cost of equipment x 1.3 x 0.19
Every £1 you spend you will save around 25p, it’s that simple!
So it’s clear to see that now is an amazing time to develop your business and invest in better equipment for a fraction of the normal price.
Contact our experts for an on-site quote or for further information. We can also assist you with finance should you need this option.
You can check all the official documentation too here:
https://www.gov.uk/capital-allowances/what-you-can-claim-on
If you are unsure about the tax implications, we suggest you contact your tax advisor or business accountant.
