130% capital allowance super deduction - what you need to know

07 Apr 2021

Since the Covid-19 pandemic, existing low levels of business investment have fallen, with a reduction of 11.6% between Q3 2019 and Q3 2020. Making capital allowances more generous works to stimulate business investment. The government decided to introduce a new super-deduction measure to give companies a strong incentive to make additional investments, and to bring planned investments forward.


What is the capital allowance super deduction?

Claim capital allowances let you buy assets that you keep to use in your business, and deduct some or all of the value of the item from your profits before you pay tax. You can claim capital allowances on items that you keep to use in your business - these are known as ‘plant and machinery’.

A new 130% first-year capital allowance for qualifying plant and machinery assets and a 50% first year allowance for qualifying special rate assets measure has been put in place by the government since March 2021. This measure provides capital allowances for qualifying expenditure on plant and machinery incurred between 1 April 2021 and up to and including 31 March 2023. The super-deduction is an enhanced first-year allowance providing an allowance exceeding the cost of the asset.


What are the benefits?

The government’s recent announcement of a 130% capital allowance super-deduction for qualifying spend on plant and machinery is great news for Bira and BAGMA members!

This means that for expenditure incurred from 1 April 2021 until 31 March 2023, companies investing in qualifying new plant and machinery assets will be able to claim 130% capital allowances on qualifying plant and machinery investments. Under the super-deduction scheme, for every pound a company invests, their company taxes are cut by up to 25p.

You can claim capital allowances when you buy assets that you keep to use in your business, for example:

  • equipment
  • machinery
  • business vehicles, for example cars, vans or lorries


How can we help through our financial partner Birmingham Bank?

Equipment loans are a great way for independent businesses to manage their cash flow. Just think about it. Your equipment is going to last you for years, but that doesn’t mean you want to pay for all those years up front.  You want the advantage that new equipment brings in helping your business to grow, without the disadvantage of seeing lots of your hard-earned money fly out the door all at once. With the super-deduction, there’s never been a better time to do it.

In order to help independent retailers with their investment plans, our financial partner - Birmingham Bank have introduced new lower equipment loan rates for a limited time only!

So, right now, it’s more cost-effective than ever to take advantage of our low rate equipment loans. Interest rates for equipment loans for between 1 and 3 years are just 3.2% (6.2% APR), and for anything above this and up to 5 years just 3.5% (6.8% APR).

Equipment Loan Rates

Birmingham Bank promotional equipment loan rates offer ends 30th June 2021.

If you’d like to find out more about Birmingham Bank asset and equipment finance packages, call on 03330 048 048 or visit www.birminghambank.com


 For all the latest financial information relevant to your independent business, visit our Financial Hub

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