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Engineer installing underfloor heating system

Learn more about the Super Deduction scheme, and more

There has never been a better time to invest in new plant. With the Chancellor's Super Deduction scheme fully in swing, we thought we'd answer a few frequently asked questions about how it all works. For additional information, feel free to contact BCAS Ltd or learn more about our other compressed air services.

  • What is Super Deduction and how does it work?
    Under the scheme businesses can reduce their corporation tax liability by 130% of the value of most new plant and machinery investments that ordinarily qualify for 18% main rate writing down allowances. This means that on a spend of £100,000, the corporation tax deduction will be £130,000, giving corporation tax relief at 19% on £130,000 which is £24,700. Normally such expenditure would either fall within a company's annual investment allowance and produce relief of only £19,000, or alternatively be tax relieved at only 18% of the cost per annum.
  • What type of equipment is eligible?
    Most tangible capital assets used in the course of a business are considered plant and machinery for the purposes of claiming capital allowances. The range of qualifying plant can be anything from computer equipment to a new production line. Compressed air-related machinery that is eligible for relief includes: Air compressors Dryers, receivers and other downstream equipment Vacuum pumps Nitrogen generators
  • What are the exceptions?
    If you are in the process of procuring equipment and have already contracted the purchase, it won’t be covered. Likewise, if you have an umbrella agreement in place already for equipment and you’re drawing down equipment from that, it isn’t covered. There are exclusions such as structures and buildings and equipment that landlords install. Care will need to be taken on leased plant and equipment which may too be subject to restrictions.
  • We have just come out of another lockdown. Is now a good time to invest?
    This scheme is designed to encourage firms to invest in productivity-enhancing plant and machinery assets that will help them grow, and to make those investments now. Many of our customers are emerging from the pandemic ready to implement development projects to ensure they are ahead of their competitors and prepared to maximise opportunities as restrictions are relaxed. The Super Deduction allowance equates to a significant cash windfall for businesses and will help to bolster cash flow at a critical time. Moreover, new plant means new, more energy-efficient and reliable technology. So, if you're considering upgrading older, energy-hungry equipment, it is worth looking into the options available and finding out how much you can save by buying and using new machinery. We would be delighted to recommend and quote for potential improvements to your existing compressed air set up.
  • Where can I get more detail on the scheme itself?
    Further information on the parameters of Super Deduction can be found on the Government website. The British Compressed Air Society is also providing guidance on how the scheme relates specifically to compressed air equipment: Click here to learn more.
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“BCAS were invited to quote for a compressor/vac system installation for a new composite dept. They were quickly able to understand the requirements for the job and even suggest ways in which cost could be saved by using alternative components. Their quote was submitted in a timely manner and was very competitive. We needed to make several changes to the specification near the date of commencement, which was dealt with quickly and efficiently by the installation team. A job well done!”

– John H, Yell

If you wish to learn more about how BCAS Ltd could assist you, please use the contact details below to reach our office in Oxfordshire.

01491 821737

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