The time is right to build back greener by upgrading your energy infrastructure. Thanks to the new Super-Deduction tax break on plant and machinery, it's never been more affordable to unlock your sustainable energy investment ambitions.
In the March Budget, Chancellor Rishi Sunak announced the brand-new Super-Deduction capital expenditure relief. It enables companies paying Corporation Tax to claim 130% capital allowances on most new plant and machinery investments that ordinarily qualify for 18% main rate writing down allowances.
In addition, a new 50% First-Year Allowance (FYA) was announced for special rate assets (including long life items). This applies to most new plant and machinery investments that ordinarily qualify for 6% special rate writing down allowances.
Super-Deduction and FYA capital reliefs apply temporarily to expenditure incurred over the next 2 years – from 1 April 2021 until the end of March 2023. These reliefs are just for new, unused plant and machinery, not second-hand or leased assets.
Businesses can also benefit from Annual Investment Allowances on investment in low carbon equipment. which has been extended to £1m for expenditure incurred up to 31 December 2021. This relief is available on second hand and leased equipment, as well as newly purchased assets.
What energy equipment qualifies for new Corporation Tax reliefs?
Most types of energy equipment should qualify for either the Super-Deduction of 50% FY, including, but not limited to: