![]() ![]() In other words you can deduct the full value of an item that qualifies for AIA from your profits before tax, for financial expenditure on up to £1m of qualifying plant and machinery. The AIA gives 100% tax relief for costs of qualifying plant and machinery in the year of purchase. So the AIA is available alongside the SR allowance and super-deduction. The Chancellor has confirmed the extension to the £1m annual investment allowance (AIA) until 31 December 2021. ![]() And the first-year allowance of 50% on special rate pool expenditure would normally only attract 6% writing down allowances.įrom an accounting perspective, our advice for businesses looking to maximise your tax savings is to plan well ahead. And that’s how much corporation tax you save if you qualify for super-deduction.īear in mind that this is a 130% deduction for investments that would normally qualify for 18% plant and machinery writing down allowances (or capital allowances). Deducting £130,000 from your taxable profits will save your business up to 19% of that – 19% of £130,000 is £24,700. When you calculate your taxable profits your corporate tax deduction will be £130,000 (i.e. Let’s say your business spends £100,000 on main rate equipment and you’re eligible to claim the super-deduction tax break on this expenditure. How did it work? Let’s look at the 130% first-year relief on qualifying main rate plant and machinery investments made during this period. The tax relief was introduced for two years for expenditure from 1 April 2021 to 31 March 2023. ![]()
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