8 Autumn Budget 2021
Capital allowances
Plant and machinery Most corporate and unincorporated businesses are able to utilise a £200,000 annual investment allowance (AIA) to claim 100% tax relief on their qualifying expenditure on plant and machinery. The allowance was temporarily increased to £1 million for expenditure incurred on or after 1 January 2019 and was due to revert back to £200,000 from 1 January 2022. The £1 million allowance will now be retained until 31 March 2023. Transitional rules will apply to accounting periods that span 1 April 2023. For companies, this aligns the end of the temporary AIA with the end of the ‘super-deductions’ as announced by the government in Spring Budget 2021. A reminder of super-deductions Between 1 April 2021 and 31 March 2023, companies investing in qualifying new plant andmachinery are able to benefit from new capital allowances, termed ‘super-deductions’ or ‘first year allowances’, as follows: • a super-deduction of 130%can be claimed onmost new plant andmachinery investments that ordinarily qualify for the 18% main rate writing down allowances • a first year allowance of 50%can be claimed onmost new plant andmachinery investments that ordinarily qualify for the 6%special rate writing down allowances. These reliefs are not available for unincorporated businesses. Comment Businesses incurring expenditure on plant and machinery should carefully consider the timing of their acquisitions to optimise their cashflow. In 2023 the tax relief rules for expenditure on plant and machinery will change and for companies the percentage corporation tax relief saving on the expenditure may change as well. Structures and Buildings A Structures and Buildings Allowance (SBA) was introduced with effect from 29 October 2018 to relieve costs for new structures and buildings used for qualifying purposes. A business must hold an allowance statement containing certain information to be eligible to claim SBA. Minor changes will be made to the allowance statement requirements to clarify the information required to be kept.
“I’m announcing today, for one year, a new 50% business rates discount for businesses in the retail, hospitality, and leisure sectors. Pubs, music venues, cinemas, restaurants, hotels, theatres, and gyms. Any eligible business can claim a discount on their bills of 50%, up to a maximum of £110,000. That is a business tax cut worth almost £1.7 billion. Together with Small Business Rates Relief, this means that over 90% of all retail, hospitality and leisure businesses will see a discount of at least 50%.” Rishi Sunak, Chancellor of the Exchequer
Made with FlippingBook Learn more on our blog