Tax Chat #1

Hugh Stedman
Managing Partner
June 5, 2022

There is currently a lot of activity and hype about the 130% super-deduction for companies that ends on 31 March 2023, you may be being encouraged to take advantage of it while it is there or thinking of bringing capital expenditure forward to take advantage of it.

Our recommendation would be not to bring forward expenditure or be pressured into making a capital investment decision due to the super-deduction.  From 1 April 2023 the rate of corporation tax increases to 25% from 19%.  19% multiplied by 130% is 24.7% so you will get slightly less tax relief on qualifying expenditure now than you will when the corporation tax rate changes.

It would appear that HMRC has introduced this super-deduction to stop companies from delaying their capital expenditure until after the new tax rate cuts in.

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