From Super Deduction to Full Expensing

How is the move to full expensing going to benefit your Capital Allowance Claim?

What is Super Deduction?

In 2021, the UK Government introduced the Super Deduction policy, designed to stimulate
business investment by offering tax incentives. This policy enabled companies to significantly
reduce their taxable profits by deducting a portion of their investment in new plant and machinery.

What is Changing?

The Budget 2023 sees a change in this strategy. Replacing the Super Deduction from April 1,
2023, is the Full Expensing Policy. This new approach allows businesses to immediately write off
the full cost of qualifying plant and machinery investments against their taxable income in the
same year the investment is made.

The shift to full expensing represents a significant change in the Government’s approach to
incentivising business investment. While the Super Deduction offered a substantial deduction, Full
Expensing expands this benefit, allowing for an immediate and complete tax relief on eligible
investments. The Government intends to make this policy a permanent feature of the business tax
regime.

How will this affect your business?

This move towards full expensing is particularly beneficial in regard to Capital Allowances. By
allowing companies to Fully Expense their investments, it enhances the attractiveness of capital
investments. Businesses can now immediately reap the tax benefits of their investments,
improving cash flow and potentially increasing their willingness to invest in new equipment and
technology.

Find out more

Speak to the STax team to find out more about Full Expensing and how to make a Capital Allowance Claim.

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