As part of The Budget on 3 March, the Chancellor announced some enhanced tax savings for certain equipment expenditure.

The relief, being branded a “super-deduction” allows you to claim tax relief on 130% of the cost of equipment purchased after 1 April.

So, for example, if you buy some equipment for £10k, you can claim tax relief on a value of £13k. This will save £2,470.

There are some important conditionals however:

• The enhanced relief is only available to companies.
• Only “plant and machinery” qualifies. That is broadly any assets that are used in your business long term, but there are some exceptions.
• Expenditure must be made between 1 April 2021 and 31 March 2023.
• Expenditure contracted for before 1 April doesn’t count, even if not actually paid for until after 1 April.
• Assets financed under Hire Purchase or similar contracts will have to meet further conditions to qualify.

As is always the case with technical tax changes in any Budget, the important detail isn’t yet available. We won’t know more until it is.

In the short term however, our advice is to delay equipment expenditure until 1 April. If you’re unsure if something is “plant and machinery,” we can help.