Kevin Read discusses some of the things about the capital allowances ‘super-deduction’ that the Chancellor did not mention in his Budget speech.
The capital allowances ‘super-deduction’ is available for expenditure between 1 April 2021 and 31 March 2023 on new (i.e. not second-hand) qualifying plant and machinery (P&M) that would normally go within the main capital allowances pool.
It is only available to businesses within the charge to corporation tax, not unincorporated businesses or LLPs, and there are certain exclusions, including most cars and expenditure contracted for before 3 March 2021.
At its maximum amount of 130%, the super-deduction means that every £1,000 of expenditure produces a tax deduction of £1,300 up-front with relief at 19%, equating to a tax saving of £247 (or 24.7%) on the amount