Archived article: this was published in March 2021. The super-deduction ended on 31 March 2023. Companies can now claim full expensing on qualifying new plant and machinery (made permanent), and the Annual Investment Allowance is £1 million. Read our Budget 2026 summary for the latest capital allowance changes.
Key Points
- Introduction of an enhanced superdeduction equal to 130% for expenditure on certain items of plant or machinery.
- on qualifying expenditure on plant or machinery from 1 April 2021 to 31 March 2023.
- if a company spends £1,000 on qualifying items of plant and machinery within the dedicated time period, it will be able to deduct £1,300 from taxable profits.
- At present, the company may be able to claim the full amount as a deduction using the Annual Investment Allowance, so in effect, the company receives additional benefit of 30% of expenditure (equivalent to a cash tax benefit of 5.7% of the original expenditure).
Eligibility and other points
- It is only available to companies within the charge to corporation tax.
- It is not available for items with a long life (over 25 years), integral features within a building, or solar panels (i.e. special rate pool items).
- It is not available for cars. The items must be new and unused.
- If the item is subsequently disposed of, the full disposal proceeds may be brought into account as taxable income.