Super-tax deduction - is it a good time to invest? Richard Neale of OPS BOX
Back in March, the Government announced that from April 1st 2021 until March 31st 2023, companies investing in qualifying new plant and machinery assets will be able to claim a so-called super-tax deduction.
Richard Neale, founder and director of OPS-BOX Group takes a look at the tax relief and asks is it a good time to invest?
Companies investing in qualifying new plant and machinery assets will be able to claim:
- a 130 per cent super-deduction capital allowance on qualifying plant and machinery investments
- a 50 per cent first-year allowance for qualifying special rate assets
So called super tax-deduction, this potentially allow companies to reduce their tax bill by up to 25p for every £1 invested, backing up that the UK is hugely competitive in the global market for capital allowances.
Of course, this incentive is offered to companies at a time when they are recovering or and still suffering from the consequences of the pandemic. However, the benefit is significant when looked at critically, encouraging businesses to invest in their assets and achieve a higher return on those investments through tax incentives not traditionally available.
It is true that in general many businesses are in a favourable position with cash reserves following the Government's laudable efforts last year in providing Coronavirus Interruption or Bounce Back loans to those eligible.
Many have decided to hold on to this cash for a rainy day, many have chosen to repay with the trading consequences on some businesses being nowhere near as pessimistically envisaged.
Finance for asset purchase
The taxation incentive is there. And despite reports to the contrary, if funding is required, this is also available.
Primary lenders are still taking stock with the impact 2020 caused to them, but there are many different lenders available, more than ready to step up and support UK companies wishing to borrow for asset purchase. Having a choice of lender is undoubtedly more important now than ever.
At OPS-BOX we have been helping to finance asset acquisition throughout this year for businesses across many sectors and have access to over 80 funders covering all areas of the asset finance industry. We can find specific finance solutions tailored to your business.
Our network extends not only to funding newly purchased items, but also the refinancing of existing owned assets in many circumstances.
If asset purchase and funding is on your agenda, get in touch with us at OPS-BOX. Using our extensive experience in lending to businesses of all size, and with FCA approval as appointed representatives and commercial finance introducers, we want to make sure that you are offered finance as competitively and compliantly as possible.
Richard Neale is co-founder and director of OPS-BOX Group. OPS-BOX provide a range of support services to help business of all size and type to grow and succeed.
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