Super Tax Deduction
The HMRC super tax deduction scheme is coming to an end. Launched in April 2021, the tax incentive enables companies to claim back up to 25p for every pound invested in ‘qualifying’ machinery and equipment. The scheme is only available for businesses paying UK corporation tax, and is not available to individuals, partnerships or LLPs.
To find out how GTC Sponsor, CVP can help you tap into this incentive before the end of March deadline, please speak to a CVP Account Manager on +44 (0) 208 380 7400, or email email@example.com
Can I claim super-deduction if I use asset finance?
In the draft super-deduction legislation (published on 3 March 2021) plant and machinery investment incurred under “a hire purchase or similar contract” has to meet “additional conditions” to qualify for the super-deduction. Some people have inferred that the 130% tax break, therefore, excludes hire purchases (or asset finance arrangements more broadly). In fact, in a scenario where your company makes payments in order to acquire an asset, and where there is an expectation that legal ownership of the asset will at some point pass to you (i.e. the lessee, as is typically the case with hire-purchase agreements), the super-deduction should be available to you. But you need to be aware of the anti-avoidance provisions that apply to, for example, contrived arrangements, agreements with connected parties, and second-hand assets. And there is a clawback of the tax saving if your business disposes of the asset prior to 1 April 2023.
Please speak to your CVP Account Manager about any product requirements or mail
firstname.lastname@example.org for asset finance requirements.