Super deduction - Time for new equipment?

[cwah]

Hello,

Sunak just announced the super deduction plan:
https://twitter.com/RishiSunak/statu...27900883320834

https://www.gov.uk/guidance/super-deduction

So if I buy a new laptop for £2000 and a new phone for £1000 as capital allowance I should be able to deduct 130% corporation tax.

Meaning £3900 deducted from corporation tax.

Are you planning to take advantage of this scheme? And what you planning to buy if so?


Note for the deduction:
130% is applied against the taxable CT calculation. So the CT reduction would be £3,900 x 19% reducing CT bill by £741 in this case.

[ladymuck]

Considering computer equipment and servers are included as plant and machinery, that's rather interesting. I didn't think that category of asset would be covered.

You might not get away with the phone purchase.

[northernladuk]

Bearing in mind you are asking a bunch of contractors, you thought about passing this one past your accountant?

[cwah]

I don't need accountant. Sunak himself mentioned the computer equipment as deductible for super deduction. It's in the list here as well:
https://assets.publishing.service.go..._factsheet.pdf

but good thing to check for the phone. Gotta find a list somewhere.

[jamesbrown]

Yes, sure, it would be rude not to purchase an exorbitantly priced workstation.

[malvolio]

The OP has just summed up rather well precisely why we have such problems getting our voices heard inside HMRC. Sure, let's spend a silly amount of money (who need a £2k laptop these days?) that we don't have to spend to screw some extra taxes out of HMG because we can...

Grump.....

[JHamp82]

Its best speaking to your accountant but it is my understanding the 130% is applied against the taxable CT calculation. So the CT reduction would be £3,900 x 19% reducing CT bill by £741 in this case.

[cwah]

Its best speaking to your accountant but it is my understanding the 130% is applied against the taxable CT calculation. So the CT reduction would be £3,900 x 19% reducing CT bill by £741 in this case.

Yes that is correct. They mentioned it in their example:
• A company incurring £1m of qualifying expenditure decides to claim the super-deduction
• Spending £1m on qualifying investments will mean the company can deduct £1.3m (130% of the initial investment) in computing its taxable profits
• Deducting £1.3m from taxable profits will save the company up to 19% of that – or £247,000 – on its corporation tax bill.
https://assets.publishing.service.go..._factsheet.pdf

[jamesbrown]

The OP has just summed up rather well precisely why we have such problems getting our voices heard inside HMRC. Sure, let's spend a silly amount of money (who need a £2k laptop these days?) that we don't have to spend to screw some extra taxes out of HMG because we can...

Grump.....

So it's OK to "screw some extra taxes out of HMG" if you're a "BigCo"?

( Ah, it's professional - better delete that insult )

The super-deduction is there to be used and I will be fully participating, bringing forward the purchase of my exorbitantly priced computer equipment to fully benefit from it.

[Lance]

not sure I'd go for this just yet on the basis of

The kinds of assets which may qualify for either the super-deduction or the 50% FYA include

until the draft legislation becomes law it would be a really dumb move to buy something you don't need. (actually - it would be a really dumb move to buy something you don't need at ANY TIME).