30th Apr 2021

Does the Super-Deduction Tax Break apply to my office?

The short answer to this question is ‘yes’. The super deduction tax break does apply to your office but only on qualifying purchases in certain categories. It also applies to other business equipment too. This blog gives you a quick overview.

*** Please note for the most up to date information from 31 March 2023, click here.

In April this year as part of the budget announcement, the Government told us all about their new £25bn super-deduction tax break scheme.

The scheme is intended to be highly beneficial for businesses. And the Government has hopes that it will aid economic recovery by encouraging businesses to invest in themselves.

What is the super-deduction tax break?

The super-deduction tax break allows businesses to claim back 130% of expenditure for new (or first year) business equipment against their taxable profits. This applies on qualifying purchases between 1 April 2021 and 31 March 2023.

The super deductions will apply as follows:
• 130% of the costs of qualifying business purchases which would normally incur main rate capital allowances
• 50% of the cost of qualifying plant and machinery which would normally incur special rate capital allowances.

A quick example:

If your business spends £10,000 on qualifying equipment, you can deduct 130% of that (£13,000) from your taxable profits.

So your business would save up to 19% of that amount (£2,470) from your tax bill.

Who qualifies?

The scheme is aimed at larger businesses and SMEs. The only main exclusions are:
• Partnerships such as accountants, lawyers, or architects
• Sole traders
• Businesses that don’t pay corporation tax

What qualifies?

Most tangible capital assets used within a business can be claimed against.

The Government hasn’t released an exhaustive list of what it calls ‘plant and machinery assets’ in the budget announcement, but it has given some examples:
• Solar panels
• Computer equipment and servers
• Tractors, lorries, vans
• Ladders, drills, cranes
• Office chairs and desks
• Electric vehicle charge points
• Refrigeration units
• Compressors
• Foundry equipment

What doesn’t qualify?

• Used and preowned equipment
• Cars for personal use (it can be claimed on commercial vehicles.)
• Assets leased out or to assets hired out

Get in touch

If you’d like to explore a revamp of your office space while you’ve got a fantastic opportunity of an increased tax break, get in touch for a chat about how we can help.