Claiming the super-deduction allowance
You may recall that we discussed the super deduction allowance in our previous post here on the Budget 2021. Following on from this we're going to discuss in more detail when claiming the super-deduction allowance may be appropriate.
What is the super-deduction allowance?
Essentially the super-deduction allowance is an enhancement to the existing capital allowances regime on plant and machinery used in a business. For most small and medium sized businesses the allowance will operate in the following manner:
Conditions for claiming the super-deduction allowance
Perhaps one of the most important points to make is that the super-deduction allowance can only be claimed by companies. Therefore sole traders, partnerships or LLP's do not qualify for relief. In addition the following conditions must apply:
Relief for the super-deduction allowance will not be available in the following circumstances
There are also special rules that need to be considered where expenditure is incurred under a hire purchase or similar agreement.
Disposals of equipment where claiming the super deduction has applied
Where assets that have previously qualified for a super deduction are disposed of a balancing charge will arise in the period of disposal. Consideration will need to be given to determine the balancing charge particularly where amounts have been assigned to existing equipment pools. The methodology of how this is calculated can be seen in this example from HMRC's guidance here.
For more useful information, check out our Ebooks here.
And if you'd like to know how we can help you with all of this, or with anything else, feel free to give us a call on 01202 048696 or email us at [email protected].
Alternatively, please feel free to complete our Business Questionnaire here.