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Super-deduction: further detail

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HMRC has published a new factsheet Budget 2021: Super-deduction setting out basic details for the enhanced capital allowances available to companies for expenditure on qualifying plant and machinery between 1 April 2021 and 31 March 2023.

The Treasury factsheet highlights ‘four significant capital allowances measures’:

  • 130% ‘super-deduction’ first-year allowance (FYA) on qualifying main rate plant and machinery (companies only);
  • 50% FYA for special rate assets (companies only);
  • 100% annual investment allowance (£1m investment cap until 31 December 2021); and
  • within freeport tax sites: enhanced capital allowances (companies only), and 10% structures and buildings allowance (increased from 3%), for companies, individuals and partnerships.

The factsheet sets out a useful table summarising eligibility of different types of investments for the different capital allowances, and an example which contrasts the position for a company making the same investment before and after the introduction of the super-deduction.

The Treasury intends to publish full technical guidance ‘in due course’.

Issue: 1523
Categories: News