Business owners often seek to maximise their tax efficiency by investing in the purchase of plant, machinery, equipment and commercial vehicles. These assets come with a 100% tax deduction, regardless of whether they are paid for in full or taken on finance, and so the timing of these purchases can be the difference between a mammoth tax liability and potentially paying little or no tax at all.
Rishi Sunak’s announcement of a new “super deduction” – providing a 130% first-year tax deduction on qualifying plant and machinery – raises an important question for businesses as many approach their financial year-end.
the 130% deduction is only available to companies (not sole traders or partnerships)
the plant and machinery purchased must be new (not second-hand)