It was announced in the recent Budget that for expenditure incurred from 1 April 2021 until the end of March 2023 companies can claim the equivalent 130% of capital allowances on qualifying plant and machinery investment. Under this deduction, for every £1 a company invests, taxes can be cut by up to 25p. This 130% super deduction is for investment in plant and machinery assets. Please note assets must be acquired unused and not second hand.
For example, a company incurring £1 million of qualifying expenditure claims the super deduction. This means the company can deduct £1.3 million (130% of the initial investment) in computing its taxable profits. Deducting £1.3 million in profits will save the company up to 19% of that or the equivalent of £247,000 on its corporation tax bill.
Please note this relief is only available to companies and is not available for unincorporated businesses.