The Budget introduced a temporary increase in the relief available for qualifying expenditure on new plant and machinery incurred between 1 April 2021 up to and including 31 March 2023, companies can claim in the period of investment:
A few key points to bear in mind:
If a company is considering making a purchase in the next few weeks, then there is a tax benefit that can be achieved by delaying the purchase until 1 April 2021 onwards. The following example illustrates this:
A company wishes to purchase a new piece of machinery for £50,000.
If this was purchased on 31 March 2021, the company would be able to claim a deduction of £50,000 resulting in a tax saving of £9,500.
If instead the purchase was made on 1 April 2021, then the company would be able to claim a deduction of £65,000, resulting in a tax saving of £12,350.
Should you wish to discuss this in more detail then please get in contact with us.