Just one in eight businesses are aware of the Super Deduction Tax Break, new research has revealed. The super deduction allows businesses to cut taxes by up to 25p per £1.
The Super Deduction Tax Break began in April 2021 to provide businesses with an incentive to make additional investments in machinery and tools, and also improve the economic growth that deteriorated during the Covid-19 pandemic.
The support runs until 31 March 2023 and enables companies to claim a 130% capital allowance on qualifying plant and machinery investments, along with a 50% first-year allowance for qualifying special rate assets. The Super Deduction also allows businesses to cut their taxes by up to 25p for every £1 they invest.
Most tangible capital assets used in the course of a business could be classed as eligible equipment, although there is not an official exhaustive list of plant and machinery assets.
The super deduction allows businesses to cut taxes by up to 25p per £1. Credit: Shutterstock
The kinds of assets which may qualify for either the super-deduction relief, but are not limited to:
More details about investment eligibility can be found on the Gov.uk website.
This tax reduction is a huge support to many businesses that may have suffered financial losses during the pandemic, however, this support is still unfamiliar to many business owners. In a recent survey conducted by auction specialists BPI Auctions, only one in eight (12%) of those questioned said they were aware of the Super Deduction Tax Break.
Whilst the tax relief may tempt you to invest money into new equipment and tools, business owners are urged to act early to ensure they can utilise the cost-saving initiative and receive the equipment in line with business needs. The research found that one in five respondents (21%) have faced delays in work due to delivery times of machinery, with some stating they faced delays of nearly three months. A further 70% of those surveyed claim that they have recently struggled to find availability for the machinery they required.
David Boulton, Managing Director at BPI Auctions, summarises: “The Super Deduction Tax Break is a significant support to businesses all across the manufacturing, construction and engineering sectors, especially those that have been affected most in the last two years. If you’re looking to take advantage of the relief to upgrade your plant and equipment, disposing of used or old items through online auctions is an efficient and easy way to raise funds quickly.
“Selling machinery you no longer require through auctions can ensure your items will be sold in a much shorter time period, and you don’t have to manage unreasonable buyers or payment delays.”
For more information, please visit https://news.bpiauctions.com/only-one-in-eight-business-owners-aware-of-super-deduction-tax-relief
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*Image credit: Shutterstock