Firms urged to ‘use or lose’ tax super allowances
Scotland’s businesses are being encouraged to ‘use or lose’ a highly attractive range of tax super allowances introduced in the Spring Budget 2021 to encourage capital investment by businesses.
The super allowances available include the ‘super deduction’, a 130% first-year allowance for expenditure on main pool qualifying assets such as machinery, furniture, fittings, computers and the enhanced 50% special first-year allowance for integral building assets such as electrical, water and heating systems.
They are available until 31 March 2023 and are in addition to the existing annual investment allowance (AIA) which permits 100% relief for up to £1 million of expenditure incurred each year on qualifying plant and machinery assets, and which also ends on 31 March 2023.
However according to Mark Pryce, tax partner with Azets in Scotland, the uptake has been very low and Scottish businesses are missing out on millions of pounds of tax relief and he is urging directors to take advantage of the incentives whilst they still can.
He said: “Business investment accounts for a significant part of GDP and is crucial to boosting long-term growth and productivity.
“The low uptake of both super allowances is down to a lack of awareness of the incentives coupled with general uncertainty over the economy.
“That said, the super allowances incentives are some of the most generous investment incentives ever created and we would encourage business owners to take full advantage before they are gone.”