Chancellor Rishi Sunak said: ‘With the lowest corporation tax in the G7, we need to do even more to encourage businesses to invest – for decades we have lagged behind our international peers. We need to unlock cash reserves so today I can announce the super-deduction. For the next two years when companies invest, they can reduce their tax bill with super deduction by 130% of the cost.
‘We’ve never tried this before in our country – the Office for Budget Responsibility (OBR) says it will boost investment by £20bn a year. It is worth £25bn for the two years it is in place, this is bold, unprecedented action.’
From 1 April 2021 until 31 March 2023, companies investing in qualifying new plant and machinery assets will be able to claim:
a 130% super-deduction capital allowance on qualifying plant and machinery investments;
a 50% first-year allowance for qualifying special rate assets.
The super-deduction will allow companies to cut their tax bill by up to 25p for every £1 they invest, ensuring the UK capital allowances regime is amongst the world’s most competitive.
Source: AccountancyDaily