super deduction

How the Super Deduction scheme benefits your business

How does the Super-Deduction scheme work?

During March last year, The Chancellor, Rishi Sunak introduced the new Super-Deduction Annual Investment Allowance. Meaning that all new business equipment purchases will be eligible and allow you to compensate 130% of the asset value against your taxable profit that year.

Take advantage of the super deduction annual investment allowance (AIA)

So, up until March 2023, business purchases, loans and cash transactions are limitless. Making this prime time to invest, as this is the British government’s biggest incentive yet.

Is it possible to take out a lease agreement and still claim Super Deduction tax relief?

The short answer to this is YES! From a tax planning outlook, a hire purchase or lease purchase agreement has the same tax conditions as if you are paying cash for an asset. Therefore, providing the asset is qualifying, you are free to take advantage of the 130% tax break!

Super Deduction induced asset finance surge

As predicted in a blog written in April by our sister company, asset finance sky-rocketed by 106% in May 2021 compared to May 2020. Proved by statistics shown by the FLA (Finance & Leasing Association). This is arguably very much due to the introduction of the super deduction scheme in March.

So, join the thousands of other businesses across the UK gaining from this incentive.

Assets which may qualify for the super deduction but are not limited to include:

  • Scaffolding Tubes
  • Scaffolding Boards
  • Trucks
  • Vans
  • Drones
  • Modular Building
  • CCTV
  • Software
  • IT
  • Business Loans

Example:

The value of the asset is £150,000

 

  • You can offset 130% (£195,000) against your taxable profit

 

  • At the current Corporation Tax rate (19%), this equates to a tax saving of £37,050

Sum:

£150,000 x 130% x 19%

= £37,050

Make the most of this business tax relief on qualifying investments and ensure your business growth by contacting Scaffold Finance today. For any questions, and to see if your desired asset qualifies under the scheme, please give us a call on 01494 506 383. Alternatively, send an email to hello@scaffoldfinance.co.uk.

 

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