New temporary tax reliefs, of up to 130% on qualifying capital asset investments, have been announced by the government.
The measure has been introduced from 1st April, for companies within the charge to Corporation Tax who invest in plant and machinery. Reliefs for expenditure will be increased temporarily until 31st March 2023.
A super-deduction of 130% can be claimed on most new plant and machinery investments during this period. This is a 112% increase from the usual main rate writing down allowances of qualifying investments. A first-year allowance of 50% has also been announced for the same period and sees a rise of 44% for special rate writing down allowances.
Chancellor Rishi Sunak expressed the importance of doing more to encourage businesses to invest. The Office for Budget Responsibility (OBR) said that the super-deduction will “boost investment by £20bn a year”, according to Sunak. He said: “It is worth