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  • Super deduction

    Maximising the benefits of capital investments

Super deduction

Two temporary first year allowances – the ‘super deduction’ and the ‘SR allowance’ can apply for capital investments made between 1 April 2021 and 31 March 2023.

Both the super deduction and SR allowance give businesses investing in qualifying plant and machinery a much higher tax deduction in the tax year of purchase than would otherwise normally occur – a ‘first year allowance’ (FYA).

They are available alongside the ongoing Annual Investment Allowance (AIA) which currently gives 100% relief for costs of qualifying plant and machinery in the tax year of purchase up to £1m. However, unlike the AIA, there is no cap on the amount of capital investment that can qualify for either the super deduction or the SR allowance.

The allowances are also available alongside the enhanced capital allowances for investing in Freeport locations – so careful consideration of claims is required.

Get your super deduction claim right

In every investment project there will be a range of costs. You can rely on our team of capital allowances experts to take you through a forensic cost segregation exercise. This will identify all expenditure qualifying for the enhanced and accelerated capital allowances in the most cost-efficient way overall. You can be confident that your claims will be accurate and optimal.

You will be working with a team that have been at the forefront of discussions and direct consultation with HM Revenue and Customs on the super deduction and the SR allowance. We are also best placed to advise you on the opportunities that these new allowances bring to your business.

Finding out more about the super deduction

You can find a full description of the super deduction, which businesses can benefit, the extent of the tax relief available and how to understand which investment qualify in this “How it works” article.