In The News
The most difficult part of being a Chancellor and releasing the purse strings to allow business to grow is how much to release and in what way. Historically the use of capital allowances and enhanced capital allowances has proven most attractive and many motor dealers have benefited from this over the years buying premises and upgrading existing premises.
In the place of enhanced capital allowances, we now have “super deductions”. They are still capital allowances but their impact is significantly more beneficial in tax terms.
They apply for all Qualifying Expenditure incurred from 1 April 2021 up to and including 31 March 2023.
They operate as follows;
This means that for every £100,000 spend you could have a tax deduction of £130,000 (£24,700 less tax to pay) or £50,000 tax deduction (£9,500 less tax to pay).
This kind of capital investment relief is unheard of in the UK and is far more generous than in any other comparable economy throughout the world.
So what can you buy to obtain the super deduction?
It is probably easier to tell you what is excluded;
There are as you might imagine rules that must be adhered to such as;
The hope is that business will invest, invest, invest and I am sure that this will spark off a number of acquisition strategies in dealerships who are looking to use this tax advantage to add a shine to a long-term strategy of growth.
This might also be the catalyst for those of you who are looking to exit in the coming years?
Please get in contact with ASE at email@example.com if you would like to discuss this in more detail.
Or visit our LinkedIn page for more info:https://www.linkedin.com/company/ase-plc/